At some point, who hasn't dreamed of being an oil sheik? They control much of the world's most sought-after commodity, next to money itself. You could buy an island and blanket it with private jets and swimming pools, just because.
Today, members of the Organization of Petroleum Exporting Countries (OPEC) suggested that oil output is adequate, and it will not support suspending output quotas. What OPEC didn't admit is that quotas are partly being ignored anyway, as countries "pump up the volume" in order to take advantage of today's crude oil prices before the spring thaw.
At $37 per barrel, oil is near the $41 record high reached during the 1990-1991 Gulf War. But war drums aren't the only problem. From December to February, oil production in Venezuela tumbled from 3.1 million barrels per day to 1.4 million in politically motivated work stoppages. A war in Iraq might add to the decline in production.
The world consumes 77 million barrels of oil daily, and OPEC supplies 24.5 million, or 32%. Iraq supplies 1.7 million barrels per day. Oil fields in Kuwait producing 700,000 barrels daily would be closed in the event of war, meaning between Iraq and Kuwait, 2.4 million barrels per day would be lost. Whether this shortfall can be replaced by OPEC is hotly debated.
Saudi Arabia said OPEC can make up the shortfall if need be, while OPEC's president said the 11 member countries have capacity to produce an additional 3 million to 4 million barrels per day. However, the U.S. Energy Administration claims OPEC's on-demand spare production capacity is only 2 million barrels daily, and some suggest it's much less than that.
The U.S. Strategic Petroleum Reserve hugging the Gulf of Mexico holds 700 million barrels of crude oil, the largest emergency reserve in the world. In 1990-1991, the reserve was tapped to restrain prices during the Gulf War. Today, as U.S. gasoline prices hit record highs, the Bush administration suggests we're not in a supply emergency yet. The U.S. consumes more than 20 million barrels of crude oil daily.