in China, India, Trade Partnerships

What If the Oil Stops Flowing from Oman Too?

china oil supply

China Imports Oil From Oman

As tensions in the Middle East continue to rise, concern about the political stability in Oman is mounting. Unrest in the sultanate has not yet reached the levels seen in countries such as Libya or even Bahrain, with only 2 deaths which can be attributed to clashes between demonstrators and security forces, but there are fears that the situation in Oman will worsen.

China and Asia Worried

The majority of oil exports from the Middle East go to China and Asia who are especially worried that Oman will join in the general grassroots uprising spreading like wildfire throughout northern Africa and the Middle East, breeding fear in the east that the supply of oil from Oman may be disrupted.

Oman is not a member of OPEC (Organization of Petroleum Exporting Countries) but it does have the largest supply of oil reserves of any country in the Middle East which is not a member.  In 2010 Oman produced 863,000 barrels per day of total petroleum liquids, almost all of which was crude oil. Over the past three years oil production there has increase by more than 20%.

Can Saudi Arabia Fill In for Libya?

At the moment there is nothing but uncertainty about how much the flow of oil from Libya will be disrupted due to the war raging there. Saudi Arabia has said that it can increase output to cover the Libyan deficit of oil deliveries, but to what extent it can do this is a big question.

West Looking East with Concern

The main importers for the oil from the Middle East and North Africa are Asia and China, who are watching the developments in the region with growing concern. Most likely, if the situation worsens and oil supplies are severely  disrupted, China and Asia will turn to Mexico for their oil, leaving countries such as the US, Great Britain and Europe to fend for themselves.

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