With oil prices rising due to the Iraq crisis, some Americans may be wondering whether gas prices in the United States will jump during the summer of 2014.
In a related report by The Inquisitr, some experts claim that the year 2060 is when the entire world runs out of oil. Politicians are also contemplating implementing a U.S. gas tax in 2014 in order to ensure the Highway Trust Fund does not run out of money and 700,000 transportation construction workers do not have to be laid off.
Not many Americans realize that United States oil production now beats Saudi Arabia due to fracking operations. To give you an idea, growth rate in the U.S. is greater than the sum of the growth of the next nine fastest growing countries combined, and has covered most of the world’s net demand growth over the past two years. Just in North Dakota alone, about one million barrels of oil are being produced per day. The U.S. position as the largest oil supplier in the world looks to be secure for many years and it’s estimated by experts that we have a proven oil reserve of about 26.5 billion barrels.
By contrast, Iraq’s oil supply has still not recovered from the war. Prior to the invasion of ISIS, the war torn country produced about 3.3 million barrels of oil a day, which is about four percent of the world’s total supply. But oil prices should have been effected in the long term since Iraq’s crude production capacity growth had been expected to reach 4.6 million barrels per day by 2019, and would represent 60 percent of all growth for OPEC nations.
Now oil prices have been rising in response to the Iraq crisis, based upon the fear that these previous estimates will not be met, and it’s even possible the supply could be cut off entirely from the rest of the world for the foreseeable future. Dorian Lucas, an analyst at British-based energy consultancy Inenco, explains what we know so far about Iraq’s oil fields:
“Brent crude has strengthened, driven by continued supply fears deriving from ongoing and escalating violence in Iraq. Brent crude could see further gains intraday as news emerges that one of Iraq’s largest oil fields is under siege by Islamist led militants; already having withstood mortar and machine gun fire. It is reported that so far the siege has resulted with the destruction of some oil stores, the full extent of which is not yet apparent.”
But while Americans may see their gas prices rise a little, it’s the Chinese who really have to fear the Iraq crisis. Chinese state-owned companies, refiner Sinopec and offshore player CNOOC, poured more than $2 billion a year and hundreds of workers into Iraq, beating out United States companies by underbidding for contracts. To give you an idea of how Iraq’s oil production affects China, last year China’s Iraq imports exceeded nearly 1.5 million barrels a day. Oil prices can also harm China more because China surpassed the U.S. in September of 2013 to become the world’s largest net importer of crude oil.