'7% shortage of oil’

Press, Volume CXIV, Issue 33455, 9 February 1974, Page 13

' 7% shortage of oil’

j (N.Z.P.A.-Reuter— Copyright) ! WASHINGTON, February 8. The Western world faces an oil shortage of 7 per cent in the first three months of 1971. according to an estimate made today by a United States Government advisory group. The Emergency Petroleum Supply Committee said in a statement issued after a meeting that crude oil supply reductions and the Arab I oil embargo would reduce the world supply of oil to 4,200,000 barrels a day ' below normal demand. J The 25-member panel, repji resenting American oil companies. predicted that the I world-wide shortage would J become “less acute” in com- • ing months as Middle East J Oil States resumed produc’ltion. ’j The shortage for the United States was estimated ■ at 2,300,000 barrels a day,

equal to 11 per cent of nor-! imal demand. ! The analysis said that the [drop in production and the 11 embargo put the Western! ‘world’s supply some r[3,000,000 barrels a day I below the September, 1973. 1 [pre-embargo level. . The Nixon Administration s today estimated that United; -[States oil imports could cost i[sNZlO,sl9 million more in .[1974 as a result of the in’[creased prices. [ The estimate came in the! annual report of the Presi-j >1 dent’s Council on Inter-; tinational Economic Policy; J 1 submitted to Congress by' - Mr Nixon. t The report projected the; elWestern world’s oil import i 1 bill as rising during the year / by $NZ49,446 million to SNZBO,4OO million. - It forecast increases of -;5NZ4,556 million in West ejGermany’s and France’s oil iiimport costs and $NZ3,819 -'million in the bills of both t Britain and Italy. -I Japan’s costs were estim-i ated as rising by ,SNZ7,f>3B e[million to $NZ12,060 million. 1 Saudi Arabia, the council’s! •,i report said, would be the I

main beneficiary of th? increased oil prices with its revenue s rising by |SNZIO,OSO million to [5NZ1.3,400 million by the end of this year. But the reduction in the ! growth of the world economy as a result of the huge oil price increases—some id [more than 100 per cent —was expected to be only “temporary.” In a press conference pr*[view of the report, the [executive director of the [council and Presidential As [sistant for International [ Economic Affairs, Mr Peter [Flanigan, said that the oil [crisis was “manageable ” [ Mr Flanigan said that it [was thought that the major industrial economies would show real growth this year, and not plunge into recession. The only country which might be an exception to this was Britain, he said. But he later noted that he did not mean to say Britain 1 would fall into a recession—only that there was "a lack of consensus” about Ithat country's growth prosipects. ■