An Irrelevant Middle East

[Geee]

National Review:

Since antiquity, the Middle East has been the trading nexus of three continents — Asia, Europe, and Africa — and the vibrant birthplace of three of the world’s great religions.

Middle Eastern influence rose again in the 19th century when the Suez Canal turned the once-dead-end eastern Mediterranean Sea into a sea highway from Europe to Asia.

 

With the 20th-century development of large gas and oil supplies in the Persian Gulf and North Africa, an Arab-led OPEC more or less dictated the foreign policy of thirsty oil importers like the United States and Europe. No wonder U.S. Central Command has remained America’s military-command hot spot.

 

Yet the Middle East is becoming irrelevant. The discovery of enormous new oil and gas reserves along with the use of new oil-recovery technology in North America and China is steadily curbing the demand for Middle Eastern oil. Soon, countries such as Kuwait, Saudi Arabia, and Iran are going to have less income and geostrategic clout. In both Iran and the Gulf, domestic demand is rising, while there is neither the technical know-how nor the water to master the new art of fracking to sustain exports.

[Valin]

@Geee

 

OPEC Is Cracking

 

and its all thanks to fracking. Members of the Organization of the Petroleum Exporting Countries are *meeting Friday to discuss cutting production in response to the new US addition to the global oil market. But delegates have already hinted that the asymmetric impact of the shale revolution on OPECs member countries has weakened the blocs resolve and will mean no agreement on curbing supply.

 

Thats because US shale oil is pitting African members against Arab members. The new American oil bounty is of the light, sweet crude variety. Its higher quality than the heavy crude produced by Gulf OPEC members. But countries like Nigeria, Algeria, and Angola have typically exported sweet crude to the US, and the shale boom is hitting them hardest. Exports from those African members dropped 41 percent from 2011 to 2012.

 

The countries hit hardest by this new supply source also have the least room to cut production. Their regimes need consistently high exports and oil prices to stay solvent and in power. If OPEC doesnt cut production, the price of oil is going to drop. Thats going to hurt Venezuela and especially Iran, which is already reeling from Western sanctions on its exports.

 

(Snip)

 

 

* Behind Paywall....try google/bing