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Oil Is Not Found Everywhere

The United States, by our action in starting a war with Iran, sparked a blockade at the Strait of Hormuz. We followed by starting our own naval blockade and since then oil prices have jumped to $100 per barrel. Many are asking: “Why?”

Why did we start this war, but, also, why is the price of oil now so high? Why does the Middle East control the price of oil?

The simple answer is that over 50% of the proven reserves for oil in the world are there, and Mid-East oil today accounts for over 25% of total annual world oil production.

It would be nice if mother nature had deposited oil equally around the world–but that is not the case. It takes a particular set of circumstances to create oil–millions-of-years of sedimentary deposition, followed by appropriate pressure and heat caused by overburden and plate tectonics. Then the hydrocarbons thus formed must find a home in a porous reservoir rock with an impervious rock above to form a seal or cap so that they are contained in the form of oil.

It takes a lot of geology, all lining up in a specific way, to make oil.

The petroleum “window” is very narrow. When it comes to hydrocarbons, oil is a very special product.

As mentioned, sadly, the creation of oil does not take place equally everywhere on the planet. Not all nations were “created equal” when it comes to having it. The most blessed area of the world in finding oil, at least in terms of our present experience, has been in the Middle East largely around the Persian Gulf.

Thus, if you shut the main transportation highway into this area, the Strait of Hormuz, through which is transported over 25% of the world’s oil production–oil prices, gasoline, diesel and jet fuel prices will all soar. It is a matter of pure economics.

One must assume that the White House knew this when the decision was made to go to war and close the Strait of Hormuz.

Because oil is an international commodity, when you cut its supply, its price goes up world-wide. If you were taking a petroleum engineering/economics course in college, this principle would likely be taught as “Economics 101.”

The reality of how oil is made and unequally distributed around the earth is apparently not a well-learned science.

As Americans, though we have more oil production than many other nations, we are also affected when the supply of oil is reduced world-wide and the price goes up. The impacts, of course, are much worse for other nations who can produce little, if any, of the petroleum that they need.

There is no doubt that, long-term, the world needs to find alternatives to oil. But, this transition cannot happen overnight. Just ask yourself, how, other than by using this resource, could you produce a liquid fuel (gasoline) which with a gallon (about 6 lbs.) can propel a car down the road for 25-30 miles, or in the form of Jet-A fuel, take a plane with 300 people to 35,000 ft. and at 500 mph take them to any place in the world? The energy density of these fuels cannot now be replicated from any other source–they come only from oil.

Again, it would be nice if oil were equally distributed around the world–but it is not. We have to deal with reality as we find it. The Middle East is and will continue to be a major producer of the oil that the world needs for the foreseeable future.

Rolland Kidder is a Stow resident.

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