Has the world entered a new era of endemic oil shortages and escalating prices?
Since the early 1970s, shortages and price hikes have been related to bouts of political instability in oil-producing countries. So it is at present: it is only to be expected that war preparations in the Persian Gulf and political turbulence in Venezuela should drive up prices. But such episodes have always conformed to a predictable pattern: sharp price escalations have been followed by slow erosion. Eventually, prices return to pre-crisis levels, at least when measured in constant dollars, corrected for inflation. (See Table A, line 5.)
But the sharp oil price increase of 1999-2000 raised the question of whether that pattern is changing. Unlike previous oil crises in 1973, 1979-80, and 1990-1, this spike was unrelated to external political shocks. That fact has given rise to speculation that either the Organization of Petroleum Exporting Countries (OPEC) cartel has gained greater influence over price setting, or that oil is becoming scarcer. Either development would auger oil price increases over the long term.
In the United States especially, there is much talk about an overall energy shortage, of which oil is the major component. Reacting to the steep oil price increases in 1999-2000, the Bush administration dramatically asserted that: "America in the year 2001 faces the most serious energy shortage since the oil embargoes of the 1970s."
If in fact an endemic oil shortage is in the making, the implications for U.S. policy in the Middle East could be considerable. For example, the U.S. government has ordered the boycotts of imports from the three "rogue states," Iran, Iraq, and Libya. In a situation of genuine shortage, great pressure might be brought to bear on the United States to reconcile itself to these regimes. A situation of shortage would also affect U.S. relations with the world's largest oil exporter, Saudi Arabia, by increasing Saudi political leverage over Washington.
So does the United States face the prospect of a muscular OPEC or a serious energy shortage? Not at all. On close analysis, it turns out that the real oil crisis has nothing to do with an endemic shortage of oil supply for the industrialized countries or a revival of the OPEC cartel. It concerns, rather, a shortage of revenues for the producing countries. The first part of this article demonstrates the absence of a shortage by analyzing the history of prices and the real reasons for the latest oil price spike. The second part demonstrates the persistence of revenue shortfalls by considering the predicament of the key swing producer, Saudi Arabia.
The Myth of OPEC
The notion of endemic shortages owes much to the persistence of the myth of an all-powerful cartel, dictating to the market. Typical is this 2001 statement from the British weekly, The Economist: "It is not geology that determines the oil price … still less the free interplay of supply and demand. Mostly, it is the whims of the Organization of Petroleum Exporting Countries… led by Saudi Arabia."
This assumption dates back to the October 1973 Arab-Israeli war. Not long after the Egyptian and Syrian military attack, Saudi Arabia and other Arab members of OPEC declared that they would curtail oil production, unless and until the United States pressured Israel to bow to Arab demands. The announcement of an embargo set off massive speculation based on the fear of future oil shortages. OPEC, which was founded in 1960 but had little influence in its first decade, stepped into the limelight as a fixer of oil prices and quantities. Average annual oil prices climbed from $3.24 per barrel in 1973 to $11.60 in 1974. It was widely believed that OPEC, led by Saudi Arabia—which alone possesses one quarter of world oil reserves—had brought about the revolutionary changes.
But that was a myth. In fact, a better way to understand the events of 1973-4 is that they were the first in a series of exogenous (external) shocks that temporarily raised oil prices, which then settled back to a more sustainable level. This was indeed what happened after the 1973-4 oil shock. Subsequently oil prices inched upward from $11.60 per barrel in 1974 to $13.39 in 1978, a nominal increase of 15 percent. But over the same period of 1974-8, inflation (measured by the GDP) rose 32 percent. This meant that real oil prices (i.e., corrected for dollar inflation) were declining. Indeed, it was quite probable that, in the absence of additional exogenous shocks, the decline in real oil prices would have been followed by a decline in nominal prices.
But new, powerful shocks intervened in 1979-80 raising prices to unprecedented heights, from $13.39 in 1978 to $36.68 in 1980. The external shocks included these events:
• Revolutionary forces under the leadership of Ayatollah Khomeini overthrew the shah of Iran in February 1979. During most of the 1970s, Iran had been the world's second-largest oil exporter following Saudi Arabia. But Iranian oil exports ceased towards the end of 1978 as the revolution gained momentum, and even when exports were resumed in the spring of 1979, they were at a much lower level. The flight of thousands of skilled Iranians as well as foreign experts, who feared the wrath of the Islamic revolution, restrained Iranian oil output even after the revolutionaries seized power. The decline in Iranian oil exports shocked the markets, especially since it was feared that the Islamic regime in Tehran would undermine the stability of the regimes in the Persian Gulf where so much of the world's oil for export is produced.
• In November 1979, there was an attempt to overthrow the Saudi royal regime, and during the weeks that followed until the revolt was finally quelled, speculative oil buying was rampant.
• In December 1979, the Soviet Union sent troops into Afghanistan. It was widely expected that the Soviet superpower would quickly overcome the Afghan resistance and move on to pursue its goal of dominating Middle Eastern oil.
• In September 1980, Saddam Hussein, Iraq's dictator, attacked Iran, beginning a war that lasted eight years. Each side bombed the other's oil installations to impair the other side's ability to export oil and earn foreign currency. For the oil markets, it meant that world oil supplies were restricted. In 1979, the year before the war, Iraqi output had reached a peak of 3.5 MBD (million barrels per day). Subsequently, hostilities reduced Iraqi output to about one MBD in 1981-3.
These repeated shocks drove prices higher. Yet despite this political turmoil, oil markets again adjusted, with more output coming on line and with consumers shifting to other fuels and adopting more energy-efficient technologies. The result was that oil prices slid from $36.68 in 1980 to $27.61 in 1985 and then collapsed to $14.43 in 1986.
Then came another exogenous shock, namely, Iraq's invasion of Kuwait in 1990. How did this affect world oil markets? In 1989 (the year before the invasion), Iraq produced 2.8 MBD. Kuwait's output in 1989 was 1.4 MBD. Because of the United Nations (U.N.)-imposed sanctions, their combined output dropped to a small fraction of those figures. Prices shot up sharply, mainly because of fear that a desperate Iraq might bomb the oil installations of Saudi Arabia, the United Arab Emirates, and other nearby oil exporters. Oil prices, which had been declining strongly in the first half of 1990, reversed course with the Iraqi invasion. In 1990, prices averaged $23.71 compared with $18.25 in 1989.
Yet once again, the effect was temporary. In subsequent years, prices dropped slowly to $19.27 in 1997 and then collapsed to $13.07 the following year.
This short history of oil prices leads to an inexorable conclusion. Over the years, political turmoil and war have produced the major oil price spikes. But despite the instability of the Middle East and the existence of the OPEC cartel, producers have been incapable of sustaining higher price levels over time. For all the talk about OPEC's power and looming shortages, the economic growth of the industrialized world has hardly been hampered by fluctuations in either the supply or the price of oil.
Fluke Crisis: 1999-2000
The years of declining oil prices following the 1991 Kuwait liberation came to an abrupt end in 1999. Prices rose to $17.98 in 1999 and then to $28.24 in 2000. There was no obvious exogenous shock causing this price increase. What explains it?
A June 2000 report by the Petroleum Industry Research Foundation provides the best summary. Low stocks (inventory), more stringent environmental regulations, and other technical hitches contributed to upward pressure on oil prices. Each factor separately was relatively small, but together they raised prices.
Part of the reason for the oil price increase was an unexpected surge in demand, due to colder winters than usual in Europe and to more rapid world economic growth than had been expected. The oil industry had also miscalculated in its movement to "just in time" inventory, a policy first introduced by Mobil Oil. The motto was: "Keep inventories low and lean," abbreviated "KILL." The policy helped company profits, but made prices more volatile.
The perception in the United States of an oil crisis was magnified by increasing gasoline prices—which rose even more than the price of crude oil—and by shortages of electricity, especially in California. Part of the problem was a drop in U.S. refining capacity in the past twenty years, from 18.6 million barrels per day to 16.5 million barrels, and an even sharper drop in the number of refineries, from 315 to 155. The reduced number of refineries makes the United States more vulnerable to interruptions if a small number of refineries stop producing temporarily. As President Bush put it, "a single accident, a single shutdown, can send the price of gasoline and heating oil spiraling all over the country. The major reason for the dramatic increase in oil prices is lack of refining capacity."
Indeed, in 2000, the United States was hit by several simultaneous factors that caused a sharp price increase in gasoline prices. The Economist suggests the following analysis:
The real problem is an accident of timing that has caused shortages in the American petrol sector … demand for gasoline is still soaring, fueled by the economic boom and the arrival of warm weather. Awkwardly, the government has chosen this moment to start selling cleaner types of petrol in a number of cities. Teething problems at refineries producing the cleaner fuel have interrupted supply and made the market tighter.
In short, the energy price increases in 1999-2000 were caused by errors of judgment, including: a shortage of refineries, in particular those producing refined oil products, which meet stricter pollution standards; neglect of infrastructure needed for electric power; bungled policies in California's electrical sector; and harsher winters in Europe which increased demand for fuel oil. The crisis of 1999-2000 was not due to any shortages of crude oil or the machinations of OPEC. Indeed, according to the Financial Times, OPEC overproduction in the midst of the crisis was 1.2 MBD.
The correction was not long in coming: oil prices headed downward in 2001. The average price for oil from the Gulf dropped from $26.24 per barrel in 2000 to $22.80 in 2001, a decline of 14 percent. The drop occurred despite the atmosphere of political uncertainty about the Gulf created by the September 11, 2001 attacks. The involvement of 15 Saudis in those attacks raised concerns about the stability of the Saudi regime and about U.S.-Saudi relations. There was also widespread concern over negative reactions throughout the Arab world to the U.S. military operations in Afghanistan. Given these uncertainties, one would have expected nervous traders and consumers to drive oil prices upwards. Instead, the price declined, showing how artificially high prices had become in 1999-2000.
Oil prices dropped further in early 2002, but they reversed course, ending the year sharply higher. The price of a barrel of "OPEC basket" crude (that is, the blended average of several countries' oil, which OPEC uses as its benchmark) rose from a low of $18.51 in early February 2002 to a high of $30.50 in late December. But this time, the causes were the usual prosaic ones: political turmoil in unstable oil-producing countries. Venezuela and Iraq, two of the seven largest oil-exporting nations, looked like problematic suppliers.
Venezuela was hit by turmoil at the state-owned oil company. During much of 2002, the company was hard-pressed to maintain output. Then on December 2, a general strike began which cut oil production from the 2.85 million barrels per day of early 2002 to an estimated 450,000 barrels per day. The effects were felt particularly strongly in the United States, which buys most of Venezuela's oil.
Beyond Venezuela, oil traders and consumers had many reasons to worry about Iraqi oil supplies. In the event of a U.S.-led invasion of Iraq, Saddam might set Iraq's oil wells on fire or blow them up, as he did to Kuwait's wells in 1991. That would greatly reduce Iraqi output for one to three years, while fires were extinguished and wells rebuilt. Or Saddam might lash out at his oil-producing neighbors. There was also concern that a U.S.-led invasion of Iraq could provoke unrest or terrorism in other Muslim countries. If these concerns were not enough reason to make oil consumers and traders nervous, Iraq itself dramatically announced a cut-off of its oil exports after April 8, 2002, supposedly in solidarity with the Palestinians. In fact, Iraq only halted its exports via the U.N. oil-for-food program, after the U.N. cracked down on Iraqi diversion of revenues into the pockets of the regime and its officials.
Given the acute political problems in two such large producers as Venezuela and Iraq, plus the worries about the effects of a U.S.-led invasion of Iraq, it is remarkable that oil prices did not rise higher. After all, it was (and remains) quite possible to speculate that continuing turmoil in Venezuela and Saddam-inflicted war damage in Iraq could remove four million barrels per day from the market. That would take up nearly all the world's excess capacity, leaving a very tight supply situation. Yet the markets remain confident that no shortfall looms on the horizon.
Is Oil Running Out?
In fact, there is no indication that oil prices are on a generally upward trend as a result of endemic shortage. During the 1970s and the first half of the 1980s, there was serious concern that "the world was running out of oil." This view has experienced a revival, dramatized by an influential article entitled "The End of Cheap Oil" that appeared in Scientific American in March 1998. But the oil shocks of the last thirty years have reduced demand for oil by stimulating the development of energy-saving technology, as well as the substitution of other energy sources for oil. At the same time, there was, and continues to be, a much greater investment in developing and applying more efficient technology for the extraction of oil.
One of the results of research and development has been a far higher success rate in finding new oil fields. The success rate has risen in twenty years from less than 70 percent to over 80 percent. Computers have helped to reduce the number of dry holes. Horizontal drilling has boosted extraction. Another important development has been deep-water offshore drilling, which the new technologies now permit. Good examples are the North Sea, the Gulf of Mexico, and more recently, the promising offshore oil fields of West Africa. Then there are Canada's giant reserves of extra-heavy bitumen that must be processed to produce conventional oil. The impediment is cost, but the experts working in this area claim that they have brought down the cost from over $20 a barrel to $8 per barrel. Similar developments are taking place in Venezuela. It is thanks to developments like these that since 1970, world oil reserves have doubled, or more than doubled, despite the extraction of hundreds of millions of barrels.
Another cause for optimism about energy supplies is that fuels other than oil are becoming increasingly available. Natural gas has become the fastest-growing source of energy. According to Peter Odell of Holland, by 2015, European demand for gas will rise by 50 percent. Gas now is 20 percent of energy demand. By 2050, it will be the main source of energy in the world. New major hydroelectric projects may further expand power exports from Quebec province to the New England states, reducing high energy costs there. A number of American, European, and Japanese firms have and are investing heavily in developing fuel cells for cars and other vehicles that would significantly reduce gasoline consumption. There is considerable research and much hope.
Less spectacularly, new technologies have improved the efficiency of oil consumption. Over a period of five years (1994-9), U.S. GDP has expanded over 20 percent while oil usage rose by only 9 percent. Before the 1973 oil shock, the ratio was about one to one.
In sum, the United States (along with Europe) faces no oil shortage, and oil supply poses no strategic problem. The Western economy is not immune to cycles, but oil is not and will not be a factor in initiating or sustaining them. For the industrialized countries, there are no grounds for a sense of crisis when it comes to oil.
The Real Shortage
There is a shortage of crisis proportions—but not of oil. There is a shortage of oil revenue. The oil exporters face a chronic problem of how to earn enough from oil to meet their bloated expenditures. The most important case in the Middle East is that of Saudi Arabia.
The image of Saudi Arabia as fabulously rich has not been accurate for many years. Beginning in the mid-1980s, a sharp decline in the volume of sales plus far lower prices meant that Saudi oil export revenues fell considerably short of what Saudis had come to expect. (See Table A, line 4.) Oil export revenues, which had peaked at $119 billion in 1981, fell precipitously to $18 billion in 1986 and then remained at the $20-24 billion level in 1987-9. The Iraqi invasion of Kuwait allowed the Saudis to increase production, replacing the decline in Iraqi output, such that Saudi oil export revenues rose to an annual average of $43 billion in 1992-9. This was almost double their level before the invasion of Kuwait but much below the flood of oil revenues in 1979-82. Again the Saudis were saved by an external event—the Iraqi invasion of Kuwait. Saudi Arabia gained doubly: former clients of Iraq now purchased Saudi oil, and prices went higher.
But even this revenue was not enough to rescue the Saudi economy. Saudi Arabia has had budgetary deficits every year since 1983, with the sole exception of the year 2000. (See Table B, line 17.) Initially, the Saudi government financed these deficits by liquidating financial reserves accumulated during the plentiful 1970s and early 1980s. When financial reserves became too low for comfort, the government issued bonds, which were bought mainly by Saudi banks and pension funds. The purchases were not entirely voluntary; one does not flout the wishes of a Saudi monarch. These deficits meant a rapidly growing national debt.
The burden of the national debt can be measured by comparing it with the annual gross domestic product. (See Table B, line 22.) The domestic debt (payable in Saudi riyals) was $19 billion in 1989, equivalent to 23 percent of GDP. By 1994, the debt had climbed to $90 billion, equal to 76 percent of GDP. By 1999 the debt had risen to $162 billion, exceeding that year's GDP of $161 billion. Saudi Arabia has seen its interest payments rise to significant levels, from $1.3 billion in 1989 to $8.2 billion in 2002. The interest payments in the latter year accounted for 14 percent of total Saudi government expenditures. (See Table B, line 12.) Payment of principal and interest to lenders has become increasingly burdensome. In short, paying for the deficits of the earlier years makes it all the more likely that Saudi deficits will persist.
In addition to the domestic debt, there is a disguised external debt. Aramco, the state-owned oil company, has an excellent credit rating and, from time to time, the finance minister asks Aramco to borrow large sums in the international capital markets. Technically these are loans to Aramco, not to Saudi Arabia. In fact it reduces the availability of capital funds for investment. Special bonds were issued to enable the government to pay off long-standing debts to farmers, suppliers, and contractors. External debt is currently estimated at $36.7 billion. (See Table B, line 23.)
The budgetary problems that have afflicted the Saudi economy since the mid-1980s raise many questions. The non-stop Saudi deficits since 1983 might have been dealt with by simply raising taxes, cutting back subsidies, or cutting down on expenditures. The Saudi monarch is an absolute ruler, at least in theory, able to tighten the national belt by fiat. But in practice there are numerous constraints, and close examination of the main sectors of the Saudi economy show why it has been difficult for the reigning monarchy to rein in expenditure.
The civil service over the years became a haven for Saudis who could not find jobs suitable to their tastes. There are some 700,000 people, many of them university graduates, who are being supported by the state. Why can't the Saudi government dismiss many of these people and encourage them to take the jobs vacated by foreigners? The answer is quite simple. Many people would protest and end up in jail, or worse.
The welfare state that the Saudis introduced in the 1960s and the 1970s has become expensive. The high Saudi rate of demographic increase, estimated at 3 percent per year, means a continuing allocation to building new schools, new hospitals, new housing, and providing more electric power, water, and transportation. Free education, free health care, and other aspects of the welfare state are a growing burden for the Saudi treasury.
Saudi military spending exceeds by far that of its heavily armed neighbors. The Saudi budget sets defense and security spending at $18.4 billion for 2003, about 13 percent of GDP, and about twice the total spent by Israel. Moreover, the figures appear to indicate an unfavorable long-term trend, i.e., a large and growing share of resources being absorbed by the military.
If the economic burden arising from huge military expenditures is so heavy, why don't the Saudis cut back drastically on these expenditures? After all, they enjoy the protection of the only superpower, the United States. Moreover, the United States also has 5,000 troops stationed in the kingdom whose purpose is "less to protect American interests, than to protect the Saudis from neighborhood bullies."
Perhaps the prime reason is corruption. Defense spending in Saudi Arabia and the other Gulf states is a way of diverting public revenues to the pockets of influential persons. In one of its more candid moments, the U.S. embassy in Riyadh issued a report regarding corruption in Saudi Arabia. The report notes that there are some very limited anti-corruption laws but "enforcement … is rare, and there are extremely few cases of prominent citizens or government officials tried on corruption charges … bribes, often disguised as commissions are commonplace. Giving or accepting a bribe is not a criminal act." The report adds that U.S. firms have identified corruption as an obstacle to investment, on which Saudi economic reform plans depend.
The prevalence of corrupt practices in the civilian as well as military sectors is likely to be a deterrent to private investment, in particular. What is the magnitude of corruption in Saudi Arabia? Unofficial sources suggest that the "commission" on military contracts runs from 5 percent to 40 percent of the contract, less for civilian contracts. A British source quotes (unnamed) Middle East analysts who believe that $10 billion disappear annually in "kickbacks and skimming." If these figures are reasonably accurate, they imply that in 1995-2000 about one-fifth of Saudi oil export revenues ended up in the private pockets of some corrupt members of the royal family and their associates.
The problem for any Saudi monarch is that he is not all-powerful. The royal family opposes many or most of the proposed economic reforms, especially privatization. The reasons are not ideological; they, the royal family, would lose control of the economy and of many benefits, legal and otherwise, that derive from economic and political power. There are various estimates as to the number of princes, running from 6,000 to 30,000. A reasonable estimate is that there are 6,000 adult male princes, and the others are wives and children. In any case the 6,000 princes are effectively those who govern.
The continuing economic problems in Saudi Arabia could come to threaten the stability of the regime. A key problem is employment for the Saudi population, which is rapidly growing at an annual rate of 3 percent. All the development plans, not to speak of statements by Saudi leaders, put great emphasis on educating and training Saudi youth to take over from foreigners the skilled, technical, professional, and managerial positions, which are both more prestigious and much better paying in the private sector. Instead, the younger generation seeks to emulate their parents and expects the regime to provide them with no-work desk jobs in the civil service, as it has done for their fathers. But the reality is that despite various laws that penalize the employers if they do not hire a certain number of Saudis, and despite various incentives to Saudi youngsters to acquire technical and professional skills, the results are meager at best.
According to official estimates, the share of foreigners within total (civilian) employment rose from 20 percent in 1974-5 to 43 percent in 1979, 59 percent in 1985, and 61 percent of total employment in 1994. Subsequently, there was a gradual decline to 52 percent in 2001. (See Table C, line 31.) In absolute terms the number of foreigners working in Saudi Arabia rose rapidly from 314,000 in 1974 to 1.5 million in 1980, and 3.9 million in 1995, and peaked at over 4 million in 1996-8. The official estimates are 4 million employed foreigners and 3 million employed Saudis. (See Table C, lines 29-30.) But estimates by the U.S. embassy in Riyadh suggest that there is an even greater Saudi dependence on foreign labor: only 2 million Saudis are in the labor force as against 5.5 million foreigners. These foreign laborers send home $16 billion a year to their families in India, Pakistan, Egypt, Jordan, and elsewhere—a massive drain of resources.
Rising unemployment among new high school and university graduates is a growing problem. The five-year development plan for the years 2000-4 puts a very strong emphasis on reducing the number of foreign workers and also creating new jobs for Saudi nationals. The development plan is very ambitious, suggesting that 329,000 Saudis can find jobs by replacing 489,000 foreign workers. The absurdity of these numbers can be seen in light of the fact that in 2000 there were 100,000 applicants; only 25,000 obtained jobs. Economic growth is far too small to create a sufficient number of new jobs for the existing unemployed and at the same time create jobs for 100,000 new entrants into the labor force.
The Wall Street Journal concludes that "the future [of Saudi Arabia] remains a race between the reformers' zeal and the royal family's resistance to economic reforms."
The oil factor in Middle Eastern politics is often miscalculated. It is assumed that the oil producers enjoy a monopoly, that they are awash in resources, and that they have vast political leverage. Especially over the past year, faulty analyses of the role of oil in politics have proliferated, in anticipation of an Iraq war.
Reality is very different. The pressing economic problems of the oil exporting countries undermine or at least weaken their ability to raise oil prices. This is why the long-term trend of oil prices will remain downward, at least when measured in inflation-corrected dollars. The United States, leader of the industrialized West, does not face the danger of an oil shortage in almost any scenario. As a result, oil should be inconsequential in the formulation of U.S. policy in the Middle East. Terrorism and proliferation of weapons of mass destruction can do much more damage to U.S. interests in the Middle East than any threat of embargo or temporary cut-off. A war to remove Saddam might cause a price spike, but it won't change the basic realities, and increased production by a post-Saddam Iraq could create excess supply. When it comes to energy, the West is more secure than in the past and is increasingly secure regarding future supplies.
But for oil producers, led by Saudi Arabia, the situation is dramatically different. Burgeoning populations, flat revenues, and massive deficits have undermined the social contract that has guaranteed domestic stability in the oil era. Nothing on the horizon will change the negative equation. The real oil crisis is not one of supply but of revenue, and it is the security of the producers themselves that has been eroded. This is bound to increase their dependence on the United States, as the guarantor of their continued survival.
The United States has the oil producers over a barrel. How it will use that unprecedented leverage, and for what purpose, will be one of the core issues of American policy in the decade to come.
Eliyahu Kanovsky is professor in the department of economics, Bar-Ilan University.
 BP Amoco Statistical Review of World Energy, 2000 (London: British Petroleum Co. Ltd., 2000), p. 14; International Financial Statistics Yearbook 1999 (Washington, D.C.: International Monetary Fund, 1999), pp. 178-9.
 The New York Times, May 17, 2001.
 The Economist (London), Dec. 15, 2001.
 International Financial Statistics Yearbook 1999, pp. 178-9, 930-2. Nominal prices, i.e., not corrected for inflation.
 Brent spot crude prices from BP Statistical Review of World Energy, 2002 (London: British Petroleum Co. Ltd., 2002), at http://www.bp.com/downloads/1087/statistical_review.pdf.
 Petroleum Industry Research Foundation, "Gasoline 101: A Politically Explosive Topic," June 2000, at http://www.pirinc.org/download/gasoline101.pdf.
 The Economist, Sept. 16, 2000.
 Financial Times Survey, Apr. 30, 2001.
 The New York Times, May 17, 2001.
 June 17, 2000.
 Mar. 29, 2000.
 BP Statistical Review of World Energy, June 2002, p 14, (Dubai crude).
 Petroleum Intelligence Weekly, Mar. 4, 2002, p. 8; Jan. 20, 2003, p. 8.
 According to the BP Statistical Review of World Energy 2002, pp. 6 and 9, the seven largest exporters in 2001 and their exports in million barrels per day were Saudi Arabia, 6.31; Russia, 4.60; Norway 3.20; Venezuela, 2.93; Iran, 2.56; United Arab Emirates, 2.14; and Iraq 2.01.
 Petroleum Intelligence Weekly, Jan. 20, 2003, p. 7.
 Colin J. Campbell and Jean H. Laherr?re, "The End of Cheap Oil," at http://dieoff.org/page140.htm.
 Financial Times Survey, Apr. 30, 2001.
 The Wall Street Journal, May 17, 2001.
 Ibid., Mar. 10, 1998.
 Rayed Krimly, "The Political Economy of Adjusted Priorities: Declining Oil Revenues and Saudi Fiscal Policies," Middle East Journal, Spring 1999, pp. 255-67.
 The Middle East Economic Digest (MEED), Sept. 18, 1998.
 See Philip Robins, "Can Gulf Monarchies Survive the Oil Bust?" Middle East Quarterly, Dec. 1994, pp. 13-22.
 A reference to Iraq and Iran. The Wall Street Journal, Oct. 31, 2001.
 Saudi Arabia, Investment Climate (Washington, D.C.: U.S. and Foreign Commercial Service and the U.S. Department of State, 1999), at http://www.tradeport.org/ts/countries/saudiarabia/mrr/mark0135.html.
 Business Week, Nov. 26, 2001.
 Petroleum Economist (London), Sept. 1993.
 Saudi Arabia Country Profile, 2000 (London: The Economist Intelligence Unit, 2000), p. 13.
 The Wall Street Journal, June 22, 2000.