by Jaafar Altaie

The world's most advanced economy and largest oil consumer, the United States, is likely to spearhead efforts to develop alternative energy sources on a global scale. When this happens, producers are likely to respond to a diminishing oil market by trying to diversify their economies to reduce dependence on oil exports. Until such a process begins to materialize, high dependence on oil is a short-term reality for consumers and producers.

According to the US Department of Energy, 2001 world oil demand is forecast to rise by an average of 1.2 percent per year. In a low economic growth scenario this takes demand from a 2001 average of 403.9 million barrels per day (mbpd) to 477.5 mbpd in 2010. In a high growth scenario, demand is forecast to increase by 2.4 percent per year, from 403.9 mpbd to 491.1 mpbd in 2010.

As long as oil remains the world's dominant energy source, net consumers and producers have to improve the management of this strategic resource.

On the consumer side, the US yet again finds itself in a position where the management of its global oil interests must be improved to mitigate persistent price and market shocks.