Levy, Walter J.
July 1971
Foreign Affairs;Jul1971, Vol. 49 Issue 4, p652
The article focuses on unprecedented demands on the international oil industry by major oil-producing countries since the late summer of 1970. Despite discoveries in the North Sea, Far East and elsewhere, it is clear that the Eastern Hemisphere will continue to depend decisively on OPEC oil to meet mounting oil requirements. With its surplus productive capacity largely gone, the U.S., too, will probably have to increase its oil imports. Within this context, the recent dramatic confrontations between the oil companies and the producing countries, which started in Libya last summer, assume great importance. In the short span of the 1960s, Libyan production rose from zero to almost 3.7 million barrels daily, rivaling the output of the leading Persian Gulf producing countries such as Iran and Saudi Arabia. The most obvious effect of the recent round of oil agreements is the striking increase in producing country revenues from $7 billion in 1970 to around $18.5 billion by 1975. Despite the great efficiency and impressive results of the international oil industry's management of its affairs in the past, the present attacks on its fundamental position make a frank analysis of past actions and future prospects utterly necessary.


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