Crude prices jumped today after…
Even with full natural gas…
A group of nine student journalists from the Medill National Security Journalism Initiative have created a website as part of a project to report on the US energy security situation. An incredibly interesting article on the site, and written by Dana Ballout, looks at how oil travels around the world on the seas, and where the vulnerable choke points are.
The Strait of Hormuz is the busiest passageway for oil tankers in the world, with over 17 million barrels (or 20% of the total world supply) moving through the narrow stretch of water each day. Disruption to this flow could severely damage global oil markets and so protecting the straits is an important job; and one of the most critical that the US Navy carries out.
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Roger Stern, a professor at the University of Tulsa National Energy Policy Institute, wrote a study in 2010 in which he estimated that the US had spent $8 trillion on protecting oil cargoes in the Persian Gulf since 1976, when its military presence in the region was boosted following the first Arab oil embargo. This is all despite the fact that only 10% of the oil passing through the straits is actually destined for the US.
Stern explained the true meaning behind the US’s reasons for heading to the Gulf en masse in an interview: “The fear grew out of a belief not just in a global peak oil, but a strong CIA conviction, that was shared by the National Security Council, that the Soviets were running out of oil, that their production was going to tank in just a few years and the Soviets had no choice but to march to the Persian gulf to get oil, so that was the rationale for the idea that a force was needed.”
I recommend the full article on Oil Change for interesting read and further breakdown on other choke points around the world.
By. James Burgess of Oilprice.com
James Burgess studied Business Management at the University of Nottingham. He has worked in property development, chartered surveying, marketing, law, and accounts. He has also…