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Latin America: Energy Supply, Political Developments, and U.S. Policy Approaches
This report examines Latin America's current political environment and its apparent effect on energy production in the region. It also examines regional integration efforts, including Venezuela's oil programs offering oil to many Latin American and Caribbean countries on a preferential basis, the Mexico-led Meso-American Energy Integration Program, and the proposed South American natural gas pipeline. The report also examines policy approaches that have been proposed for increased hemispheric energy cooperation, congressional interest: in the topic of hemispheric energy security, and related legislative initiatives in the 109th Congress.
World Oil Demand and its Effect on Oil Prices
Demand patterns for world oil and oil products show significant diversity by country, region, and product groupings. As a result of this diversity it is not possible to attach blame for the current level of price to any one nation, region, or product segment. The view that the oil market is international in scope and tightly interrelated is enhanced by the demand data. As a result of the integrated nature of the world oil market it is unlikely that any one nation acting on its own can implement policies that isolate its market from broader price behavior. As new major oil importers, notably China, and potentially India, expand their demand, the oil market likely will have to expand production capacity. This promises to increase the world’s dependence on the Persian Gulf members of the Organization of Petroleum Exporting Countries, especially Saudi Arabia, and maintain upward pressure on price.
World Oil Demand and the Effect on Oil Prices
Demand patterns for world oil and oil products show significant diversity by country, region, and product groupings. As a result of this diversity it is not possible to attach blame for the current level of price to any one nation, region, or product segment. The view that the oil market is international in scope and tightly interrelated is enhanced by the demand data. As a result of the integrated nature of the world oil market it is unlikely that any one nation acting on its own can implement policies that isolate its market from broader price behavior. As new major oil importers, notably China, and potentially India, expand their demand, the oil market likely will have to expand production capacity. This promises to increase the world’s dependence on the Persian Gulf members of the Organization of Petroleum Exporting Countries, especially Saudi Arabia, and maintain upward pressure on price.
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