Oil market in the 1990s: implications for ESCWA countries

This paper, prepared for the ESCWA Expert Group Meeting in Amman, Jordan, 20-23 November 1989, concerns the outlook for oil markets in the coming decade and the implications of certain market trends for the ESCWA countries, including both the energy exporting and energy importing members of ESCWA. It is argued that increasing oil consumption may well bring world oil production close to physical capacity before the end of the 1990s, thereby provoking an increase in real oil prices. It is further argued that the uncertainty surrounding this scenario is asymmetric; it is more likely that real oil prices will rise than that they will remain stable or fall. Other major trends, including enhanced worldwide concern for the environment and the bilateralization of world trade, also will affect ESCWA countries. The authors conclude that member countries should expand petroleum exploration activities, improve the operating efficiency of their national oil companies, bring domestic energy prices into line with world markets, expand natural gas development and marketing efforts, participate in multilateral trade negotiations, and expand co-ordination in all energy matters. (Author)