EconAir

  The high and sustained price of crude oil is having unintended consequences.   Global consumption of crude oil rose by 14% between 2000 and 2010, about equal to the increase in population.   Almost all of the increase was in Asian countries, especially China and India, and, surprisingly, the Middle East and other oil-exporting countries.   The Middle East as a whole increased oil consumption by 56%, led by Saudi Arabia with a 78% increase.   Heavily subsidized and inefficiently used, domestic consumption of oil accounts for about one-fourth of Saudi Arabia’s huge oil output, about 2.5 million barrels a day.   In contrast, the U.S. and Europe decreased oil consumption by a small amount, less than 1% in the U.S, over the same period.   Some of this is due to the recession, but there are longer-term trends that might lead to continued decreases in total oil consumption. It is important to remember that crude oil is an input; peopl...

The post-war rule of autocratic, secular strongmen backed by their military and secret police is coming to an end.   Last year saw the fall of regimes in Egypt, Tunisia, Libya and Yemen.   There is open revolt in Syria.   Demonstrations continue in Bahrain, even after earlier demonstrations were suppressed by Saudi Arabian troops.   The kings of Morocco and Jordan have made concessions towards democracy.   A democratic election that went against the ayatollah-supported regime in Iran was disqualified and leaders were arrested; despite this, anti-government demonstrations continue.   Then there is the special case of the overthrow of Hussein in Iraq. The immediate issue is the lack of economic growth and development, the inability to provide jobs for its young population.   The demographic clock is ticking.   Within a generation or two, the Middle East will have a smaller, older population, with the possibility of far fewer resources t...