Papers - - Petroleum Economics - Tanker Rates and Canal Tolls as Factors Determining Markets of Foreign Oils

With the exception of the United States and Russia, none of the leading world powers have within their boundaries the oil supplies needed to meet present peace-time requirements, and even in regard to the United States it is admitted by competent observers that the known oil reserves within the country are inadequate to meet demands for more than a comparatively few years. It follows, therefore, that the transportation of petroleum—almost entirely by tank steamers—from foreign fields to the main consuming centers is one of the most important factors affecting the present and future development of the oil industry. The world-wide distribution of petroleum is affected by numerous factors of which international politics is not the least important. The assurance of an ample supply of petroleum—one of the most essential munitions of war—is of paramount importance particularly to those countries subjected to the rivalries of powerful neighbors. And paralleling the importance of the control of an ample supply is that of its safe transportation from the fields to the consuming centers. To illustrate: France is dependent almost entirely on foreign sources for its petroleum requirements estimated at close to 100,000 bbl. daily, and in order to control such a supply after the World War it acquired an interest in the Iraq oil fields. Lately it has undertaken the construction of a pipe line from these fields to the Mediterranean seaboard in Syria with the expectation that late in 1934 these fields will supply between 30 and 40 per cent of the country's requirements. It should be noted, however, that the availability of this supply is entirely dependent on the safe operation in the Mediterranean at all times of an adequate fleet of tank steamers. Thus, in order to transport 40,000 bbl. daily, it will be necessary for one 10,000-ton tanker to leave Tripoli, the Syrian port, say for Marseille, every other day throughout the year while to meet the entire present peace requirements of France from the Iraq fields, a fleet of some 30 such tankers must be kept in continuous operation between Tripoli and Marseille.