As world crude oil demand is expected to increase by 50% from the current 90 million barrels per day by 2030, the current supply/usage balance is becoming increasingly endangered by the most recent geopolitical disturbances. These confrontations are weighing against the mostly Western leading developed nations (U.S., Japan, U.K. Germany) still heavily dependent on oil from OPEC, and in the case of Europe, natural gas from Russia.

 

Three major disturbing global events have added to the already increasing cut back of oil production and exports from OPEC, riddled with rebellions in Iraq, Libya, Syria, and Nigeria:

 

1) Western sanctions against Iran are meaningless, since Tehran has moved much of its oil production to China, and other Southeast Asian nations, which have not subscribed to these restrictions. This has put particular pressure on the European Community's oil demand, already strained by the previously mentioned OPEC nations' instability.

 

2) Saudi Arabia, the lynchpin of OPEC's 30 million barrels per day average has lately reduced shipments to an average nine million barrels per day, where a solid one-third of OPEC world supply had been expected. Whether this is due to refinery maintenance as the Saudis have maintained, or the possible reduction in long term reserves, has yet to be determined.

 

3) Most urgent, due to the current confrontation between the U.S./Europe combine and Russia is the European subcontinent's dependence on Moscow for more than one-third of its supply of natural gas. Major offsets by U.S. liquid natural gas shipments to minimize the Russians' leverage are a minimum of five years away.

 

Looking into the most immediate future, the major reduction of oil supply from the OPEC nation's one-third of global oil requirements could be further imperiled by the potential reduction of the Saudis' questionable reserve levels. Also worsened is the spreading of religio/tribal militancy in the Mideast and Africa, the hub of most OPEC production. Even Venezuela, which is under increased internal tension during the post Chavez era, could conceivably become increasingly undependable.

 

Replacement of substantial lost fossil fuel supplies (coal, oil, and natural gas) by renewables in the immediate future is, as of now, a subsidized pipe dream (pardon the pun); while higher oil and natural gas prices are a certainty facing the globally consuming public as demand increases, while supply dwindles, relative to demand. A new energy crisis is sure to be forthcoming.