Oil’s Trouble Spots

…Due to the oil embargo of the 1970s, a number of countries have plans to mitigate the impact of an oil supply disruption. Some have their own strategic reserves to protect against short-term oil shortages. The International Energy Agency, a membership organization to address energy issues, also coordinates national reserves (PDF) among twenty-seven member countries including the United States to share oil reserves during emergencies. After Hurricane Katrina in 2005, a number of countries supplied oil products to the United States; even though United States has a massive strategic supply of crude, the storm knocked out a significant portion of the country’s refining capacity.

Supply disruptions, or fear of such, are due to everything from political instability and terrorism to the weather and a lack of long-term investment, says Sarah O. Ladislaw, an energy fellow at the Center for Strategic and International Studies. Accidents, such as a pipeline explosion in late 2007 that cut “critical supplies” (Forbes) of oil from Canada to the United States, can disrupt oil supplies, as can a lack of reinvestment of oil revenues into infrastructure, a problem some experts say is exacerbated by the recent rise in resource nationalism. Ladislaw points out that the best ways to protect against disruptions are to diversify supplies and suppliers, to ensure the economy is running efficiently, and to carefully manage geopolitical relationships.

Major oil and gas production exists in some of the world’s most volatile regions. Here is a look at some that generate the most concern.

CFR