Across the globe, oil and gas supply at risk

“While most supply threats in the past had never lasted more than a few months, the security of supply has become more of a ... (permanent) issue” since the al-Qaida attacks nearly five years ago, says Ehsan Ul-Haq, chief analyst at PVM Oil Associates in Vienna.

Violence in key oil-producing nations accounts for much of the world’s energy instability.

In Iraq, insurgent attacks on the country’s main pipelines north into Turkey have slashed hundreds of thousands of barrels a day from prewar exports of around 2 million barrels a day.

Oil ministry officials said recently they hoped to reach those pre-invasion levels soon. But that requires a protracted pause in insurgent attacks — and the assumption that Iran will not fan major unrest among the country’s Shiites in retaliation for U.S. pressure on its nuclear program.

It also does not take into account corruption and smuggling valued in the billions of dollars that a recent Iraqi government report described as the biggest threat to the country’s economy.

Political strife in the Niger Delta has hurt the oil industry in Nigeria, the world’s 10th-largest oil provider, with militant bombings and kidnappings slicing 20 percent off average production of 2.5 million barrels per day. Ethnic or political conflicts in Chad and Sudan, Nigeria’s regional neighbors, interfere with the development of promising oil reserves.

Disheartening? Worse may lie ahead, as the world’s hunger for energy grows, the tussle for oil and gas intensifies — and the turmoil perpetuates itself.

“Instability is contributing to higher prices and that makes the seizure of oil and gas assets even more attractive,” says Klare.

“We have to brace for more conflict.”

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