SHORTAGE OF OIL

Chronicle (Levin), 15 July 1947, Page 5

SHORTAGE OF OIL

Press Assn.-

jjiternatiojial Radoning May ' Be Necessary

By Telegrayh

Covyright

(§pre cial Gorrespondent. ) ReCeived Monday', 7 p.m. • LONDON, July 14. j Although .world production pf ,pil is; higher today than it was prewar, recentj davelopmeats in United Stn,t,es ;nre, largely responsible for the gro.wing; possibility of .a wnii^wide ghprtpgp.; Ameriean requirements for oil are npwj 57 per cent. gr.eater tha.n thpy were in' 1938 and instead pf us.ing 55 per aent.. ,pf wprld supplieg she is .pxp.e.ct.ed fo; absorh 70 per qenf. :tl?is y,epr, Instead of ;l?.eip.g p net e^porter of oil, Ameri.ca is now a net impqrter and. her petrole.uni trade this year is likely to show that she impprted between 2,500,000 and 5,000,000 tons more than she expdrted. Thi3 Will rnean that unless she ca.n eurb .the gr.owing dem.ands of her industry, the rest of* the world may have to go phprt of .oil by several Uiillion tons yearly. Ofiicial figur.es for 1938 and 194G show that in 1938 world consumption of oil totalled 2,056,000,000 barrelg. Qf that America used 1,137,000,000 or 5p.3 per cent. The remainder of the world uspd 919,000,000 or 44.7 per c.ent. America 's net contribution to world supplies was 139,000,000 barrels or lp.2 per cent. In 1946 the estimated world .consumption of oil was 2,8-37,000,000 barrels. Of that to'tal America used l,791,000j000, an increase of 57 pei cent. over 1938 and 63.1 per ce.nt. of the world supply. The remainder of the world used 1,046,000,000 barrels, an increase of 14 per cent. over prewar but 36.9 per cent of the world supplies. America 's net contribution to world supplies fell to 6,000,000 barrels. During the flrst quarter of this year, iiowever, that contribution disappeared entirely. America imported soine 45,000,000 barrels of crude oil and liquid products. Her exports totalled only about 33,000,000 a deficit of 12,000,000. On the balance, thej'efore, America is contributing nothing to me.et world needs but is actually drahving on the rest oi the world 's po.ol pf supplies and not, it may be noted, world surpluses. According to ofiicial figures for 1946, America still remained a net exporter of refined or high quality prpducts such as petrol, kerosene, fiiesel and fuel oil But in that year her prewar export surplus in these finishted prQducts fell from 88,000,000 tp 36,0.0.0,000 barrels— a drop of close on 60 per cent. The effects of America becoming a net importer of oil include rising priees, the threat of eeonomic dislpcation and perha"ps hardship in other countries whose deniands cannot be nret, with the eventual reaction on the recovery of international trade. Those countries short of dollars may feel the pinch. Though world production oi qil is increasing pnd there is no lack of potential resources of crude' oil in the estab-

lished flelds to meet the steadily expanding world denifind, .extra faeilities for refining, tranSpo'rt and distribution •a'fe needed. The 'fp6sition here, however, is complicafed* by the world shortage of steel. Steel is the prineipal bottleneck which is limiting the construetion of refineries and ocean tankage, the laying of pipelines and the building of tankers. It is also affect-. ing the provision of facilities for xnak ing oil available to world userg such as rail tankcars, delivery vehicles and storage depots. The shortage of steel ig also chee'king the rapid expansion oi Middle East supplies and the repair oi war damaged plants both in Europe and the Fpr East. In the Netherlands East Indies, for instance, production today is some 8,000,000 tons lower than it was prewar. Lack of steel is one oi the faetors complicating the return to full prewar production in this area. It is stated, however, that even if steel were available in adequate quantities to meet current deniands, there would still be an appreciable timelag between its delivery and a further increase in the flow of world oil supplies. Looking at the wprld situation in general, it is stated that with care and what amounts to international ratioiiing, there should he sufficient supplies to meet the minim'uin essential demands of the various i£hTionsU>It , ig ^likely,however, that a period- of ■ two to tliree years may elapse before expanding world production catches up with the steadily increasing world demand.