PrintDuring the 1980s and 1990s, energy security declined in importance as oil prices fell and spare capacity stood at high levels. This was reversed in the decade that followed and once more energy security became a priority in policy agendas of most oil importing countries.
High oil prices, threats of terrorist attacks, instability in many oil-exporting countries and the rise in so-called ‘oil nationalism’ have raised serious concerns about the security of oil supplies. In the background, there are fears that the world may be running out of oil with many observers predicting an imminent oil supply crunch (Campbell and Laherrère, 1998) and raising doubts about the size of proven oil reserves in the Middle East and elsewhere (Simmons, 2005).
These doom laden predictions about the availability of oil supplies and the size of reserves are gaining popular credence at times when oil market conditions are tight. Many international agencies, such as the Energy Information Administration (EIA) and International Energy Agency (IEA), are also predicting a healthy growth in global oil demand in the next 20–25 years, driven primarily by high growth rates of non-OECD Asian economies.1
Given that the Middle East is endowed with the bulk of the worlds’ oil reserves and is responsible for a large share of global oil production, security of Middle East oil supplies is central to the oil security debate. In fact, some analysts consider that the most important facet of energy security is “limiting vulnerability to disruption given rising dependence on imported oil from an unstable Middle East” (Martin et al., 1996). Others equate the improvement of energy security with reducing dependency on Middle East oil. In his State of the Union Address in 2004, US President George Bush declared that “America is addicted to oil, which is often imported from unstable parts of the world” and that breakthroughs in technology will help the US “reach another great goal: to replace more than 75% of our oil imports from the Middle East by 2025”.
The fact that high dependence on Middle East oil creates serious grounds for concern should come as no surprise. The region has experienced a relatively large amount of disruption, some causing large losses of supplies such as that which followed the Iraqi invasion of Kuwait resulting in a cumulative loss of 420 million barrels during the period 1990–1991 (see Table 1 at end of article). The region has witnessed wars, civil conflicts, invasions, revolutions and terrorist acts.
This list is usually widened to include potential sources of instability such as the unresolved Palestinian question and the Arab–Israel conflict, the rise of anti-US feelings in the region (Sweig, 2006; Regan, 2007), the revival of Shi’a Islamism (e.g. Allaf et al., 2004; Nasr, 2006a, 2006b; alternatively, for a sceptical view of Shi’a revivial see Terhalle, 2007); the rise of radical Islamism (e.g. Mazarr, in press), the threat from al-Qaeda that has recently “risen from the grave” (Hoffman, 2007), the possible emergence of Iran as a nuclear power, the instability of political regimes and the problem of youth unemployment in many Gulf States (e.g. Byman and Green, 1999).
Despite these various potential sources of instability, it has not been all bad news when it comes to the security of Middle East oil supplies. The Middle East and in particular the Gulf States continue to act as the main supplier of oil to global markets.
In many instances the region has played the role of a swing producer, absorbing supply shocks from within and outside the region. For example, the large loss of oil caused by the Iraqi–Kuwait invasion was filled by the available spare capacity in Saudi Arabia. Recently, some Gulf States (especially Saudi Arabia) have invested heavily in their upstream sector with the aim of increasing their productive capac
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