The US and other OECD countries are concerned by their “oil addiction” in general and specifically their dependence on Middle East oil. Indeed, the world has, does, and will continue to depend on the Middle East for over half its oil. That is hardly surprising since this region holds over half of the world’s energy reserves. But this dependence varies considerably – from a high of 82 percent of Japanese demand to 26 percent for Western Europe and 21 percent for the United States. However, Algeria and Qatar have supplied completely reliably large amounts of the gas needs of Europe and Asia, which means the latter in turn can depend less on such alternative suppliers as Russia. Gas disputes have upset relations between Russia and its neighbors, notably Ukraine, Belarus and Georgia, and persist between Russia and the EU over monopoly control over exports and pipelines. Thus, supplies from the Middle East help to mitigate the pressure that Russia can bring to bear. In addition, in the case of oil, Saudi Arabia and other suppliers from the Arabian Gulf have provided uninterrupted exports for the past quarter century. Negative aspects of course include the case of Iran, which supplies 4 percent of Europe’s oil and 10 percent of Japan’s, and earned about $51 billion from its energy exports in 2006 so that oil revenue helps to support an extremist, clerical regime which subsidizes terrorist organizations and rejects the State of Israel. When all the vast host of issues are taken into consideration, the best course of action is probably energy interdependence, diversification, and risk reduction.
