Military and political crisis in the Near East worsen the situation on the world petroleum market: delivery of petroleum to the international market is reduced, and the prices for it increase. However the prices for shares of the energy companies and the companies of the military industry with the beginning of military actions tend to decrease, as short-term military actions do not provide the bases to expect big income.
Expectation of war with Iraq has lifted the world prices for petroleum from $24 a barrel (1 barrel equals 158,8 liters) in September to $30 a barrel in November 2002. According to analysts of Amoco Company, on the territory of Persian Gulf countries two thirds of all world oil reserves are allocated. The states of Persian Gulf in 2001 have provided 22.8 % of all import of petroleum in USA. On the territory of Iraq were discovered petroleum deposits containing 112.5 billion barrels of petroleum. According to data of BP Statistical Review of World Energy, Iraq has the second-largest petroleum stocks in the world after Saudi Arabia (261.8 billion barrels). For comparison: stocks of Kuwait are estimated in 98.6 billion barrels, Iran - 89.7, Russia - 48.6.
In 2000 Iraq occupied the seventh place in the world on deliveries of petroleum after Saudi Arabia, Norway, Russia, Iran, Venezuela and Nigeria. In 2001, according to the International Power Agency, it is not even among the ten largest producers of petroleum.
According to calculations of British Petroleum Company, the control over Iraqi petroleum is extremely important in the strategic plan. The matter is that at present rates of extraction of petroleum stocks of Iraq will last almost 129 years (the first place in the world on this parameter). For comparison: the Kuwaiti deposits will end in 128 years, Saudi - in 85, Iranian and Azerbaijan - in 67, Russian - in 20, Turkmen - in 12, American - in 10 (only maintained deposits are taken into account).
According to International Energy Agency, war with Iraq in 1991 has resulted in reduction of petroleum deliveries by 4.3 million barrels a day. Then the world economy has lost daily 1.6 million barrels of the Kuwaiti petroleum. The world prices for petroleum have jumped up from 16 $ to 40 $ for barrel. The Iranian-Iraqi war (began in 1980) had similar effect. Then deliveries have decreased by 4.1 million barrels. For the petroleum market the Iranian revolution (at the end of 1978) was followed even by more serious consequences - then consumers didn?t get 5.6 million barrels per day. The Arabian-Israeli war of 1973-1974 and embargo on petroleum deliveries, entered by the Arabian states, have reduced deliveries by 4.3 million barrels a day. For comparison, in October 2002 Iraq daily produced 2.45 million barrels, Russia - about 7 million barrels. Nowadays the countries of the world consume approximately 77 million barrels a day.
To secure themselves from petroleum crises, the governments of industrially developed countries, which are the basic consumers of petroleum, have created sufficient stocks, which are enough to supply the power systems of the country during 90 days. In October 2002 the state stocks of 26 industrially developed countries of the world added up to 1.3 billion, stocks of the private companies to 2.5 billion.
It is curious, that on the share market expectation of war has more negative influence, than military actions themselves. For example, before the beginning of war with Iraq in 1990 share index Standard & Poor (which takes into account exchange rates of securities of 500 largest companies of USA) has fallen, and after the beginning of war again has risen and has increased by 28 % during one year. In opinion of Standard & Poor analysts if war in Iraq finally begins, and it will be short, most of all from it will win not petroleum, but technological and transport companies. War with Iraq can help economic development. However, it will take place only in case if war is short, and Saddam Hussein is defeated.
Author: Sergei Zanin
