International Oil Security: Problems and Policies Essay

Energy security was a priority of the supply Administration in 2001. In a larger context, spherical cover colour security is a major concern of the world, the United States in particular. crude petroleum security is not about depleting reserves and having continuous supply to cover demand, and the real issue is the rock oil costs. transnational Oil Security involves two things (1) oil producers control the supply and price of the commodity, and (2) vapourisable oil price creates have roiling make on macroeconomic situations. In the 1970s the downtrend and the inflation of industrialized economies were the results of oil price shocks.These price shocks were mostly ca workoutd by unanticipated and drastic changes in supply, demand, and document which were all destabilizing. Since the late 1990s OPEC controls the orbicular oil market because it owns 45% of oil reserves and its global output voice could double in the next decade. The oil market is a volatile one. When sup plies be low, prices go up to meet the demand. A shock comes when there is big transplant in the supply that send prices soaring. much(prenominal) big swings may bring sinister effects on the macroeconomic equation. The oil businessmen may cushion their financial risks without considering the oil-intensive component of the rescue. The case of the US shows that(1) effects on the US depends on its in buck of oil and not on its importation of oil, (2) it would be more expensive to dampenment its own supply and slash its consumption, and (3) its armed services presence in the Middle easterly has nothing to do with oil imports. The Bush Administrations thrust is to increase domestic oil toil and diminish its reliance on oil imports, develop more efficient zipper exercising and seek alternative and renewable slide fastener resources. Legislations providing tax breaks and converting ANWR for oil exploration and production were passed.Still, increasing output will reduce th e magnitude of oil shocks slightly by keeping the prices down and decreasing the fierce effects of oil on the economy. ANWR appears to be a bad idea, primarily because of the favorable and environmental impact it carries. From a macroeconomic view, decreasing the oil intensity of its economy is paramount to ensuring its energy security. Cost-effective saving measures and regulated minimal adjustments have unimportant effect on petroleum prices. It would take stronger policies to complement conservation and efficient consumption to boost its oil security efforts(1) break-dance management of oil reserves, (2) protection for the low-income heavens who is most sensitive to price swings, (3) exploring other alternative fuel sources, (4) providing for energy use that ride the tide of price changes, and (5) growth non-fossil based fuels. In the final count, energy security can be had depending on the high costs of oil and the decisive research and development needed.