International Oil Security: Problems and Policies Essay

Energy security was a priority of the shrub Administration in 2001. In a larger context, global crude security is a major concern of the world, the United States in particular. inunct security is not about depleting militia and having continuous supplement to deal out demand, but the real issue is the crude crude be. International Oil trade protection involves two things (1) crude producers control the supply and price of the commodity, and (2) volatile oil price creates have disruptive ca utilise 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 aboutly caused by unanticipated and drastic changes in supply, demand, and inventory which were all destabilizing. Since the late 1990s OPEC controls the global oil market because it owns 45% of oil reserves and its global output share could double in the next decade. The oil market is a volatile one. When supplies are low, prices go up to join forces the demand. A shock comes when there is big shift in the supply that send prices soaring. Such big swings may bring disastrous effects on the macroeconomic equation. The oil businessmen may cushion their pecuniary risks without considering the oil-intensive component of the economy. The case of the US shows that(1) effects on the US depends on its consumption of oil and not on its importation of oil, (2) it would be more expensive to increase its own supply and rationalize its consumption, and (3) its military front line in the Middle East has nothing to do with oil imports. The bush-league Administrations thrust is to increase domestic oil end product and lessen its reliance on oil imports, develop more efficacious energy utilization and seek alternative and renewable energy resources. Legislations providing taxation breaks and converting ANWR for oil exploration and production were passed.Still, increasing output will reduce the magnit ude of oil shocks slightly by keeping the prices down and decrease the intense effects of oil on the economy. ANWR appears to be a gravely idea, primarily because of the social and environmental impact it carries. From a macroeconomic view, diminish the oil intensity of its economy is paramount to ensuring its energy security. Cost-effective conservation measures and regulated minimal adjustments have insignificant effect on petroleum prices. It would take stronger policies to complement conservation and efficient utilization to boost its oil security efforts(1) better management of oil reserves, (2) protection for the low-income sector 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) developing non-fossil based fuels. In the final count, energy security can be had depending on the high costs of oil and the critical research and development needed.