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World Oil Resources, Reserves and Production

Recent estimates of limited oil resources as constituting a constraint on the future of oil, lack validity. The issue is unimportant for the oil market for 50 years. Similarly, fears for the adequacy of annual additions to reserves are unfounded: the world is running into oil, not out of it.By contrast, the geography of reserves development is important. Twothirds of reserves are in the Middle East, but 85% of these are irrelevant to global production to 2010, given the potential in OECD and non-OPEC developing countries, and the maintenance of the current oil price.Thus, demand for Middle East oil will remain frustratingly modest. Efforts to expand production, necessarily in cooperation with major oil corporations, will regenerate fears elsewhere for supply security and create prospects for regionalising global oil around the three groupings of OECD countries, to which the non-Middle East OPEC members will adhere.

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Energy Specializations: Petroleum – Exploration and Production; Petroleum – Markets and Prices for Crude Oil and Products

JEL Codes: Q41: Energy: Demand and Supply; Prices, Q40: Energy: General, Q35: Hydrocarbon Resources, Q38: Nonrenewable Resources and Conservation: Government Policy

Keywords: Oil supply, OPEC, OECD, oil reserves, security of supply

DOI: 10.5547/ISSN0195-6574-EJ-Vol15-NoSI-6

Published in Volume 15, Special Issue of the bi-monthly journal of the IAEE's Energy Economics Education Foundation.


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