WASHINGTON -- The Middle East, long recognized as a top oil producer, is taking on a new role as one of the world's fastest-growing regions for energy consumption.
The increased clip at which it burns petroleum -- twice its historical average and close to the rate in the Asia-Pacific region -- is contributing to tight global oil supplies while demand continues to rise in the United States and China.
The growing thirst for fuel in countries such as Saudi Arabia, Qatar, and Kuwait reflects strong economic growth induced by soaring global energy prices. Another factor is that US military operations greatly depend on fuel purchased in the Persian Gulf.
This increased demand, which is only now starting to register with many experts, comes at a time when a debate is intensifying about whether a supply glut may develop in the next few years.
With the Organization of Petroleum Exporting Countries pumping as much as it can -- and threatening to cut output if there is any significant drop in demand -- some analysts believe the cartel should be able to put a floor underneath prices for several years to come.
Yesterday, oil prices slipped as traders took profits after prices surged on fears that Iran might halt oil exports, and after a cold front in the northeastern United States was milder than expected. Light, sweet crude for March delivery fell 26 cents to settle at $65.11 a barrel on the New York Mercantile Exchange. Cambridge Energy Research Associates, which is sponsoring a conference this week in Houston, estimates that worldwide production capacity will rise to 101.5 million barrels per day by 2010, leaving a healthy 7.5 million-barrel-per-day emergency cushion if output is disrupted.
For now, though, the world has a cushion of under 2 million barrels per day, or 2 percent of total consumption. As a result, crude oil futures are likely to stay high because of geopolitical uncertainty and rising consumption linked to economic growth.