Oil is the new gold in the world economy, and more than any factor other than the nation of Israel, oil holds the key to the prophetic events of the future. Oil explains why the Bible focuses its end time attention on the Middle East. The demand for oil in America has outstripped its capacity to produce. The same holds true for much of the rest of the world. Since the discovery of huge supplies of oil in the Middle Eastern countries, world attention has focused there.
Few would question that oil has become the new basis for our world economy. It is the resource most highly valued by the industrialized and emerging nations of the world. The greatest source is now in the Middle East, so that is where the world is focused. Below is a brief table of the top four countries oil reserves in billions of barrels.
One Saudi Arabia 265.3
Two Iran 137.5
Three Iraq 115.0
Four Kuwait 101.0
United States is ranked 11th with a mere 29 million barrels in oil reserves. The top five countries with the greatest known oil reserves are Arab nations with a total of almost 716,000,000,000 barrels in reserves. The Middle East area has about 60% of the world's known oil reserves. The processing facilities developed in those countries by major Western oil companies have long been nationalized.
Furthermore, Arab control of oil goes beyond the realities of supply and demand. Historically, all of the worlds oil has been traded in US dollars, which has assured stability for the dollar and the US economy. The dollar has always been backed by the gold standard until Pres. Nixon took it off in 1971. But then in 1973, oil prices rose sharply, threatening to throw the dollar into a free-for-all around the world. In order to stabilize the dollar, the US government entered into a relationship with Saudi Arabia, the world's largest oil supplier. According to the agreement, the United States would back to Saudi Arabian government as an ally if the Saudis would demand that all purchases of its oil be in US dollars. This would ensure the dollar in the world economy. The net effect of this agreement was that the US dollar was, in effect, backed by oil instead of gold. Then on February 17, 2008, Iran opened its trading exchange in which oil is brokered in Euros instead of dollars, further threatening the stability of the US dollar.
It probably comes as no surprise to anyone that the world's number one consumer of oil is America, guzzling almost 21,000,000 barrels of crude oil per day, or 25% of all the oil produced in the world. If present trends continue, US consumption will rise to 27 million barrels a day by 2020, and demand will expand to 34% by 2030. Added to this is the fact that the United States consumes 43% of the world's motor gasoline, and no new gasoline refinery has been built in the United States since 1976. Stop for a moment and ponder the meaning of all this: the United States is number 11 in oil reserves and number one in oil consumption, with the demand growing by leaps and bounds. It doesn't take a rocket scientist to see that a crisis is looming in our future.
More on this tomorrow.
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