While Americans wince as they fill up their SUVs with $2-a-gallon gasoline, market forces are smiling on the Saudi Arabias and Exxon Mobils of the world.
A transfer of wealth of historic proportions is taking place as worldwide spending on oil is expected to grow this year by about $295 billion, or 27 percent, compared with 2003, according to government data. Consumers and businesses are paying substantially more for gasoline, heating oil, diesel and other products derived from crude as demand and prices surge.
While the corresponding windfall of profits for oilexporting nations and petroleum companies is sapping strength from the international economic recovery, it’s not causing the kind of financial shock that followed the oil crises of the 1970s.
Still, experts warn that the market constraints underlying high and volatile energy prices suggest that higher oil prices could be here to stay. ‘‘There’s not a consensus out there, but the question is being asked more now than it has been at any time in the last 20 years,’’ said Jim Burkhard, director of global oil at Cambridge Energy Research Associates in Cambridge, Mass.
Rising oil costs are linked as much to America’s apparent drive-at-any-price car culture and China’s raging industrial expansion, as they are to the world’s unusually thin supply cushion, a condition that has magnified anxieties about potential supply disruptions in Venezuela, Russia and Nigeria.
With oil futures marching to the $55-per-barrel level this month — up from about $30 a year ago — the list of winners is topped by Saudi Arabia, Russia, Norway, Iran, Venezuela and other leading exporting nations. Saudi Arabia alone supplies about 12 percent of the world’s daily oil fix.
Exxon Mobil Corp., Royal Dutch/Shell Group and the rest of the private petroleum giants are also flush with cash as profits and stock prices soar. The same goes for oil field services firms such as Schlumberger Ltd. and Baker Hughes, as well as the countless smaller providers of the equipment, ships and workers needed to produce and transport some 82 million barrels per day.
The extra $295 billion spent on oil this year comes courtesy of, but not without complaint from, motorists, homeowners, manufacturers, airlines and truckers. The biggest share would come from (no shocker here) Americans, who account for nearly a quarter of global daily oil demand.
United States consumers are expected to shell out an additional $40 billion this year just to heat their homes and fuel their cars and trucks. The greatest financial squeeze is felt by lowand fixed-income families, who spend about three times as much of their wealth on energy as do middle-income families.
European economies are generally worse off, with the prospects for rising inflation and unemployment in the region somewhat higher, according to a report by the In ternational Energy Agency and the International Monetary Fund.
European countries do not have as much of their own oil production as the Unit ed States, where roughly 2 out of every 5 barrels consumed is pumped domestically.
In Asia, the picture is mixed.
With some exceptions, the world’s mushrooming oil tab falls hardest on developing nations, particularly those in Asia and sub-Saharan Africa, which tend to be the most dependent on imports and the least energy efficient.
‘‘We in the rich countries complain a lot about higher prices but it is not our countries that will be hurt the most,’’ said Fatih Birol, chief economist of the Paris-based In ternational Energy Agency.
Yet despite the severe economic hardship likely in low-income energy importers such as Laos, Mongolia, Pakistan and Ethiopia, according to World Bank estimates, the oil price spike of 2004 has not delivered nearly as much economic punishment in the developed world as the energy shock of a generation ago, which was marked by recessions and fuel shortages.
A major difference is that the per-barrel cost of crude peaked at $80 in 1981, or about $25 more than the current futures price, on inflation-adjusted terms. Greater fuel efficiency has also helped blunt the effects of higher energy prices this time around.
REAPING THE REWARDS
The countries and companies responsible for quenching this everincreasing oil thirst are raking in the dough.
Based on Energy Department estimates, the value of Russian exports will rise by about $28 billion in 2004, while the value of Norwegian exports is on track to grow by $10 billion. The Russian and Norwegian industries rely on extensive investment from private companies, which are sharing in the growing wealth.
The Organization of the Petroleum Exporting Countries alone is expected to see its oil export revenues rise by $115 billion, or 47 percent, in 2004, according to Cambridge Energy Research Associates.
Private oil companies are also reaping fatter profits.