CFR Analyzes Non-OPEC Oil Production

The Council on Foreign Relations (CFR) has published a new backgrounder on oil output by countries who are not members of the Organization of Petroleum Exporting Countries, or OPEC. The backgrounder, written by Council on Foreign Relations staff writer Toni Johnson, is titled "Non-OPEC Oil Production" and is available on the CFR web site.

According to the backgrounder, non-OPEC countries produce more than half of the world's oil (60 percent), despite the popular perception that OPEC controls the high demand resource. However, CFR notes, many of these oil producing countries are experiencing increased production costs due to old infrastructure that limits the amount of oil that can be produced. Seven of the top fifteen producers of oil, CFR says, are not OPEC members. They include Russia, the United States, China, Mexico, Canada, Norway, and Brazil.

While several non-OPEC states have seen declining oil production of late, the backgrounder says overall production figures are boosted by rising output from Brazil, Canada, Russia, and some of the countries that belonged to the former Soviet Union. Total non-OPEC nation oil output should rise by a million and a half barrels per day by the end of next year, according to CFR. At the same time, OPEC countries will likely increase output by more than 1 million barrels per day as well, resulting in a worldwide increase of nearly 3 million barrels each day. The increases will be necessary to meet rising demand, CFR says, which is estimated to rise by two and a half million barrels per day over the same time period.

Many non-OPEC nations are looking at ways to increase production even further. CFR notes that Mexico, the United States, Canada and Brazil are all actively pursuing additional energy resource production options. One of those options, currently being investigated by the United States, involves corn-based ethanol. High oil prices, the backgrounder says, provide countries with an impetus for looking at unconventional energy production methods such as those that involve the use of ethanol.

Critics of increased production argue that demand needs to be reduced by limiting consumption of energy resources. According to the backgrounder, the United States uses more than 20 million barrels of oil each day, which translates into about one fourth of total consumption in the world. One way to decrease demand, some analysts say, is through the imposition of a tax that would increase the cost of gasoline.

Source: Council on Foreign Relations web site