Antrim Energy Inc. ATGYF

Global Oil Demand

[barsax]

Allan's Iran post got me thinking about something that I heard recently about the incremental increases in global oil demand. Aside from the horrific consequences of a western pre-emptive strike on Iran - the new French President seems to be on the same page as George W on this issue - I wanted to touch on how the oil shortages will get worse in spite of a US led consumer recession. David Rosenberg of Merrill Lynch has been shouting about the inevitable US slow down that is going to pull down the entire global economy with it. Since he has been making this dire prediction for about a year now he has staked his credibilty on it. He may be right. But, here's the thing. As far as global oil demand is concerned the incremental demand is coming from a whole host of nations that don't charge their citizens the going rate for world oil. They shield their citizens by subsidizing the cost of gasoline within their borders. China does it, I believe the Indians do, I believe the Iranians do, the Saudis? other producing nations? In short there is no incentive for a large percentage of the world's population to cut back on oil consumption , or in striving to become more energy efficient. The rising costs aren't passed on to them by their governments to the same extent that American consumers are feeling the pain. Even in Canada we have been sheltered somewhat from the rise in crude prices by the rapid appreciation of the Canuck buck relative to the $US. I was reminded of this in reading an article about OPEC increasing production to satisfy western oil thirst. The author made the point that nevermind about increasing production to meet western demand for oil, their own increase in demand was accelerating faster then they themselves could increase their own supply. This is particularly true in Iran where there are significant domestic economic issues that are affecting their internal politics. Despite their fundamentalist rhetoric there is a large well-educated affluent middle class that needs appeasing. I submit that the corner-stone of that appeasement starts with cheap abundant energy. That means that Iran must forego selling that production on the open market at top dollar, and instead use the oil to satisfy an increasingly agitaed population. Ahmadinijhad (how the heck do you spell that?) made all kinds of economic promises during his last election campaign. Now he's having trouble delivering. Despite their impressive reserve numbers, their oil field infrastructure may not be able to accommodate a production increase so easily. Anyway the rotation of multiple US led strike forces continues off the Iranian coast. I pray it doesn't come to war with Iran. Effects of turkey starting to kick in. Night all... barsax