saunafool (98.13)

Indonesia Quits OPEC

May 28, 2008 – Comments (1) | RELATED TICKERS: PMX , COP , CVX

This shouldn't be a surprise. Indonesia slipped into becoming a net oil importer in 2005. OPEC stands for Organization of Petroleum Exporting Countries.

Yet, it is a pretty dramatic lesson of the dangers of Peak Oil. In 1990, Indonesia was a net exporter to the tune of 700,000 barrels per day or so. Now, they are importing. Production is still declining, consumption is still climbing.

This is a familiar story around the oil patch. The oil producing nations have booming economies right now, driving their consumption up at rates of 5% per year or more. Combine domestic consumption growth with declining production and you end up with exports falling very rapidly. The next chip to fall will likely be Mexico, where their 1 million barrels per day of exports to the U.S. could evaporate within 4 or 5 years. That's going to hurt.