{
  "id": "RL31676",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL31676",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 101461,
      "date": "2003-04-29",
      "retrieved": "2016-04-08T14:46:55.590544",
      "title": "Middle East Oil Disruption: Potential Severity and Policy Options",
      "summary": "Military action in Iraq disrupted the world's crude oil supplies, but sufficient world supply was\navailable during the disruption to keep the resulting price spikes within tolerable levels. With the\nelimination of the regime of Saddam Hussein, the resumption of Iraqi oil exports seems near, world\noil prices have fallen, and adequate supplies from other exporters are available to satisfy near-term\ndemand, which is entering the seasonally slack spring period.\n  Until they halted in mid-March 2003, Iraq's petroleum exports recently averaged about 1.5\nmillion barrels per day (mbd), significantly less than the 3.7 mbd lost to world markets during the\nGulf crisis in 1991. Consequently, price and supply impacts of the recent interruption were less\nsevere. And other exporting nations were able and willing to increase crude oil supply during the\ndisruption. The Organization of Petroleum Exporting Countries (OPEC) -- holder of nearly all of the\nworld's spare production capacity (equal to about three times Iraq's exports in 2002) -- filled the\nsupply gap.\n  OPEC administers a set of production quotas for its members, attempting to maintain prices in\na range of $22 to $28 per barrel. Production by the OPEC-10 (excluding Iraq) increased as quotas\nwere raised in the face of prices exceeding $30 (they briefly peaked at $40). The high prices resulted\nfrom added factors outside the Persian Gulf, including an oil workers strike in Venezuela. With\nVenezuela producing at about half its pre-strike level and Iraq's exports halted, other OPEC\nproducers were able to keep world production constant. However, little reserve margin remains and\nprices have been slow to fall into OPEC's target price range.\n  This relatively benign oil disruption scenario took place because the conflict in Iraq did not\nimpact other Persian Gulf producers. Had the conflict involved other producing nations or transport\nroutes serving them, much larger oil market impacts would have resulted. With only Iraqi\nproduction affected, crude oil prices spiked briefly above $30 per barrel, and average U.S. gasoline\nprices rose by 31 cents per gallon. A wider disruption could have caused price spikes as great as $53\nper barrel and of indefinite duration.\n  In case of a major loss of crude oil to world markets, the United States has a range of policy\noptions that are available for a timely response. Chief among these is the Strategic Petroleum\nReserve (SPR), which has an initial drawdown rate of 4.3 mbd. A Northeast Heating Oil Reserve\n(NHOR) could provide temporary relief should there be shortages of home heating oil in New\nEngland. The President can also release funds from LIHEAP, the Low Income Home Energy\nAssistance Program. The United States is also a member of the International Energy Agency (IEA),\nwhich can orchestrate a coordinated world drawdown of oil stocks. Oil disruptions often spur\ndiscussion as well about energy conservation measures, increased domestic production, and other\nlong-term policy options.\n  This report will be updated as events warrant.",
      "type": "CRS Report",
      "typeId": "REPORTS",
      "active": false,
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      "topics": []
    }
  ],
  "topics": [
    "Energy Policy",
    "Foreign Affairs"
  ]
}