The recently climbing gas prices may only be foreshadowing the extreme stress a possible war with Iraq could put on the economy, and, in particular, oil prices. Right now the rise in gas prices is attributed to war panic, and a strike by oil producers in Venezuela, the world’s fifth leading exporter of oil. However, should conflict become intense in Iraq and the surrounding region, it would most likely restrain oil shipments, a problem since almost a fourth of oil imported to the United States in 2001 originated from the Middle East, according to the Energy Information Administration’s Web site.
Despite the obvious pressure on Iraq and the surrounding Persian Gulf region due to a possible war, the United States continues to import the majority of its oil from such sources. What is needed is not peaceful relations with neighboring countries, cooperation with Iraqi oil companies, or a decrease in United States oil consumption, although that wouldn’t hurt. The United States needs to dramatically decrease its invested interest in Middle Eastern nations’ oil supplies and focus on alternative oil sources. Russia, which is the world’s second largest oil producer, only delivers a small fraction of its oil to the United States. The reason behind this is certainly not a lack of demand, but complications transporting oil to the United States from Russia, according to the Energy Information Administration’s Web site.
By supporting the Russian oil effort, Americans will not only be lowering the prices they are paying for gas, but they will be refusing to support the economies of countries who are our enemies.
As of now, Russia utilizes a number of long distance pipes to transport oil from Russia to various countries in Western Europe. The problem is that Russia has no straightforward way to ship oil to the United States. However, a deepwater oil terminal at Murmansk has been suggested that would enable Russian oil to reach the United States. The mere suggestion, however, will not get oil to the United States or lower our prices, and in reality a strong effort is needed to encourage this act to actually occur. If businesses do invest in the Russian oil market, tensions due to Middle Eastern conflicts will ease.
Furthermore, if the United States did engage in a closer business relationship with Russia, it would not only benefit Americans, but Russia as well. Russia’s oil industry, which has been struggling to catch up to technological advances that occurred before the fall of the Soviet Union, has made recent strides in producing and refining oil, but there are still more advancements to be made, according to Peter Valko, associate professor of petroleum engineering.
“Russia exports more than it used to because of capital investment, and since the fall of the Soviet Union, exports have been steadily increasing. Before trade can increase with the United States, you need political stability in Russia,” Valko said.
To build this political stability, financial investments must be made in Russia, as well as other countries that are secondary oil sources for the United States. Nigeria, South America, and Mexico all have multitudes of oil reserves not being pumped to their capacity because the United State’s oil needs are already being met by the Middle East. By making plans now to invest in Russian oil as well as other global sources, the United States will protect itself from possible problems that could arise due to conflict with Iraq.