Tensions in the Middle East are threatening oil shipments, the United States is importing oil at a record rate, and American consumption of gasoline is near an all-time high. Twice during the 1970s, that was the recipe for an oil crisis.
But oil industry executives, analysts and government officials say that the same set of circumstances today is unlikely to put Americans into gas station lines in coming months. The world oil market is so different today, according to these experts, that nothing short of an all-out war in the rich oil fields surrounding the Persian Gulf would provoke another energy crisis.
There is considerable slack in the world's oil supply chain, industry experts say. Although the noncommunist world uses about 47 million barrels of oil a day, its oil fields have a capacity about 10 million barrels greater than that -- the result of years of conservation efforts and the development during the past decade of oil fields in Alaska, Mexico and the North Sea.
While some of the excess capacity is in the Persian Gulf, there is enough elsewhere to make up for much of the 6 million to 9 million barrels a day that would be lost in a complete shutdown of shipments of oil through the Strait of Hormuz. Some Persian Gulf oil -- perhaps 2 million barrels a day -- also could be diverted into pipelines for shipment, experts say.
In addition, most oil-consuming nations have taken steps since the last oil crisis to lay in large supplies of oil that could be drawn upon to tide nations through a time of shortage. For example, Japan, which imports all of its oil and gets most of it from the Persian Gulf, is believed to have 150 million barrels of oil parked in tankers off shore. That's enough to keep the nation going for 30 days in the event of a loss of imports, considered highly unlikely.
The United States has a strategic petroleum reserve of 530 million barrels in salt mines in Louisiana. With the ability to pump that oil out at the rate of 3 million barrels a day, the United States has enough in reserve to cover the loss of half its roughly 6 million-barrel-a-day crude oil imports for nearly six months.
It is unlikely that the United States would lose that much imported oil, since most of the foreign crude now comes from politically secure suppliers such as Canada and Mexico rather than OPEC.
"The strategic petroleum reserve is a very positive force, because it is available and we have mechanisms to use it," said Michael Smolinski, director of world oil services at Data Resources Inc., a Lexington, Mass., consulting firm.
There also have been major changes in the way oil is traded around the world. Since the 1979 crisis, oil futures markets have sprung up, giving companies the ability to hedge their supplies, while structural changes in the oil industry have allowed even the large oil companies to be more flexible and sophisticated in dealing for oil supplies.
Taken together, these factors provide the world's oil supply with a much greater cushion than has been available in the past.
"Demand is up and imports are up, but it just seems that so much has changed since the last time we had a crisis that I'd be surprised to see a new one emerge," said John Sawhill, a former deputy secretary of Energy who now is a partner in the Washington office of McKinsey & Co., a management consulting firm.
"The world is not likely to be physically short of oil," said Larry Goldstein, an analyst at the Petroleum Industry Research Foundation, a New York consulting group. "Consumers don't have to be concerned the way they were in 1973 and 1979 in terms of physical unavailability of supply. What they have to be concerned about ... is price."
"A lot of people are starting to talk about emergency plans and so forth," Energy Secretary John S. Herrington said. "I think the emergency plans that we have in place today will guarantee that we won't have a repeat of the 1973 and 1979 crises."
"Realistically, it's a time of tension, but it's not a time of considerable worry," another administration official said. "I think we've got a blip here, and that's pretty much it."
But that doesn't mean the threat to supplies posed by Iran won't have some effects on consumers.For instance, despite the generally abundant supply of petroleum, which normally would tend to push prices down, crude oil prices have moved up in recent weeks, and continuing tensions could keep them up -- with increases eventually passed to consumers.
The price of a barrel of oil for delivery in September rose as high as $22.67 on the New York Mercantile Exchange last week -- twice the price of a year ago -- before dropping below $21 yesterday.
"Emotion is what has been running this market lately," said Peter C. Beutel, a oil trader for Elders Futures Inc. "A lot of fear, a lot of uneasiness."
Analysts say that while it's hard to predict how continued tensions would translate to prices at the pump, it's highly unlikely that prices would return to the $1.50-a-gallon level of the 1979-80 crisis.
"We've lived through those price levels, people have survived them, so it's not as scary as if we were breaking into brand-new record territory," Smolinski said.
However, the experts said it is possible that the tension in the Mideast could build to a point where the supply jitters would spread from professional traders to consumers, igniting a panic that could briefly put Americans into gas station lines even though supplies are adequate.
If prices at the pump were to suddenly shoot up, or if the news from the Persian Gulf caused consumers to believe that a gasoline shortage were imminent, motorists might rush to top off their tanks.
Experts say that one of the most volatile parts of the nation's gasoline system is what they call "rolling inventory" -- the gasoline in the tanks of the nation's 140 million vehicles.
Just adding five gallons to the average in each tank over a month's time would increase the nation's gasoline demand by 555,000 barrels a day, or about 8 percent, according to Thomas Burns, manager of economics at Chevron Corp.
"That's the kind of panic reaction that does tend to drain the system, make it look like a shortage where none exists," Burns said. "Nobody has really come up with a good way to prevent consumers from doing that."And then there is the worst-case scenario, in which the tensions build to a point where a major war erupts in the Mideast, endangering the oil fields of Saudi Arabia.
That, experts say, would be more likely to force a rerun of the '70s crises than is the current situation."You've really got to get a war involving Saudi Arabia that really threatens to shut in a lot of their production or damage their fields in some way that it takes them months to get them back," Sawhill said. "The probability of something that major, I think, is pretty small."
But the experts have another warning: While the world's oil situation now is quite healthy, the long-term outlook is more dire. By the middle of the next decade, they warn, OPEC will control virtually all of the world's excess oil capacity and be in an extremely strong position to set prices and supply conditions. Under those circumstances, a minor threat such as now being posed by Iran could be greatly magnified.
"We don't get too panicked over the short-term situation -- maybe we should -- but we're real scared about the long term," said an economist for a major oil company. "Down the road, we're going to be extremely dependent on OPEC... . As we get into the 1990s, all the surplus capacity will be gone, except for the Middle East OPEC surplus. Then they'll really have us under their control."
Staff writer John M. Berry contributed to this report.