WORLD OIL SHORTAGE IF AMERICA INCREASES CONSUMPTION

Evening Star, Issue 26153, 15 July 1947, Page 5

WORLD OIL SHORTAGE IF AMERICA INCREASES CONSUMPTION

(N.ZIP.A. Special Correspondent,.) LONDON, July 14. Although world production of oil is higher to-day than it was before the war, recent developments in the United States are largely responsible for the growing possibility of a world-wide shortage. American requirements for oil are now 57 per cent, greater than they were in 1938, and instead of using 55 per cent, of the world supplies, she is expected to absorb 70 per cent, this year. Instead of being a net exporter of oil, America is now a net importer, aneb her petroleum trade this year is likely to show that she imported between 2,500,000 tons and 5,000,000 tons more than she exported. This will mean that unless she can curb the growing demands of her industry the rest of the world may have to go short of oil by several million tons a year. The effects of America becoming a net importer of oil include rising prices, the threat of economic dislocation, and perhaps hardship in other countries whose demands cannot be met with the eventual reaction of recovery of international trade. Those countries short of dollars may feel the pinch. STEEL SHORTAGE A FACTOR. Though world production of oil is increasing and there is no lack of potential resources of crude oil - in established fields to meet the steadily expanding world demand, extra facilities for refining, for storage, transport, and distribution are needed. The position here, however, is complicated by the world shortage of steel. “ Steel is the principal bottleneck which is limiting the construction of refineries and ocean tankage, the laying. of pipelines and the building of tankers. It is also affecting the provision of facilities for making oil available to world users, such as rail tank cars, delivery vehicles, and storage depots. The shortage of steel is also checking the rapid • expansion of Middle East supplies and the repair of war-damaged plant both in Europe and the Far East. Looking at the world situation in general, it is stated that with care and what amounts to international rationing there should be sufficient supplies to meet the minimum essential demands of the various nations. It is likely, however, that a period of two to three years may elapse before the expanding world production catches up with the steadily-increasing world demand.