Russia poised to become oil king With Saudi security risks, world has little choice

[NewGuy]

The terrorist attack in the Saudi Arabian city of Khobar over the weekend may have tremendous implications for international petroleum markets, Western security and Russia's standing in the world.

With Saudi Arabia's security risk on the rise and fears that violence will increase there, the world has little choice but to turn to Russia as a source of secure – and reasonably priced – petroleum exports.

Russia is poised to assume leadership of crude-oil export markets, the implications of which also could significantly affect Russia's domestic political and economic order.

When President Bush and Russian President Vladimir Putin meet in Normandy, France, later this week for D-Day commemorations, it is unlikely they will spend much time discussing the past. More likely both will be keen to discuss the present and future of international petroleum production and export.

For Bush, the present is marred with problems: International terrorism has come to oil-export giant Saudi Arabia, a barrel of oil hovers around $40, at home a gallon of gasoline costs up to $2.50 and weapons of minor destruction limit the prospect of Iraqi oil significantly impacting international oil markets any time soon.

The future does not look very promising either for Bush. Energy-hungry China and India also are actively interested in sourcing new and secure energy export markets.

For Putin the present is very secure – too secure for some, who view the Russian president as a growing autocrat. Putin has good reason to feel confident. Since 1999, Russia's petroleum production has increased 48 percent, primarily on the back of flows from new wells. Producing 9 million barrels of oil a day, Russia is the world's largest producer.

Due to almost unprecedented global demand, the Kremlin's coffers receive an additional $1.5 billion per month, and a number of petroleum-market experts claim high prices last year made up about 3 percent of Russia's 7.3 percent gross domestic product growth. Experts also estimate that each dollar above the yearly average of $22 per barrel adds 0.25 percent to GDP.

Putin also is looking to the future. During his address to the nation last week, he called upon his oil ministers to finalize plans to increase output to 11 million barrels a day by 2009. Russia's expected export increase, in conjunction with other world suppliers, is hoped to lower the cost of crude as early as 2006.

Bush and Putin also may discuss what the future holds if Saudi Arabia becomes a target of larger and increased terrorist attacks. Without Saudi exports of crude, OPEC would lose its influential powerbroker.

As the largest producer in the world, Russia might rethink its position concerning membership in the international petroleum cartel if Saudi exports were to face long-term risk.

More in the article.

 

[HGROKIT]

let's see...and we are not exploring off shore and anwar (sp) because why?

i know ther are some southpaws on the boards that can refresh our memory

Russia? for cyrin' out loud!

 

[007]

All this happening could be turned into a golden opportunity here for America... to become the worlds leader in "VIABLE" alternative energy.

Make all these oil pumping nations DRINK their precious oil. It would be super sweet to be able to tell them "keep it, we don't need it".

"Now, do you need some FOOD"? America is still the bread basket of the world, and that is a major bargaining chip.

 

[MtnBiker]

Originally posted by HGROKIT
let's see...and we are not exploring off shore and anwar (sp) because why?

i know ther are some southpaws on the boards that can refresh our memory

Russia? for cyrin' out loud!

Because the rocky tundra would be forever voilated and ruined for only 6 months worth of oil. (sarcasm off)

 

[Zhukov]

I've been an advocate of buying the vast majority of our oil from Russia since the collapse of the Soviet Union. The Bush I/Clinton adminstrations missed a almost unbelivable oppurtunity to help finance the construction of the petroleum infrastructure of Russia and former Soviet republics.

A mutual public works project to extend a automobile/railroad/oil pipe support structure across the Bearing strait would have led, and still could lead, to an unprecented and unshakable amount of co-operation between our two countries. Which would be good economically and strategically for both of us.

And finally, and most importantly, it would decrease our dependence on middle eastern oil. I'd much rather deal with the Russians.