It's called the black gold, and it drives the world's largest economy and its foreign political agenda. But the word black is taking on a dark meaning for the US this hurricane season First it was Katrina and now it's Rita. What is next? A closer look at the state of oil supplies to the US suggests energy woes suffered at home today may be overshadowed by less imminent ones brewing beyond the country's shores that have to do more with politics than natural forces. Hicham Safieddine reports At home, hurricanes Katrina and Rita have dealt a serious blow to the country's economy. A quick survey of the Gulf of Mexico reveals that the semi circular shoreline is a major hub of US oil operations. The ports, refineries and offshore drilling rigs dotting the coast affected by the hurricanes from Corpus Christie, Texas to Lake Charles, Louisiana handle close to 30 per cent of the countries' oil refining capacity, 29 per cent of its oil production, and much of the nation's oil imports. Hurricane Katrina crippled much of the gulf's operations in its wake. Almost a month after the storm's landfall, four major oil refineries are still out of service and will take weeks if not months to fix by some estimates. The shutdown in oil processing prompted the US department of energy to make a total of 24.2 million barrels of crude oil available from its Strategic Petroleum Reserve stockpiles. Hurricane Rita's impact on the oil industry may not be as severe, but signs of damage to oil platforms were reported by major oil companies this weekend. The energy department expressed its willingness to tap into the SRP for more oil, as it did after Katrina, if necessary. It is too early to fully assess Rita's damage, but the US Minerals Management Services says close to 90 per cent of off-shore oil output in the hurricane-battered gulf, producing some 1.4 million barrels a day, hit a complete halt over the weekend. The double impact of the hurricanes will be long- lasting on the economy if disruption of oil, electricity and other infrastructure operations are all taken into account. While the American government's ability to control the aftermath of these two natural disasters is likely to strengthen as the hurricanes fade away, the same cannot be said with certainty of the US's control of oil resources outside its borders where politics rather than nature steer the course of events. Since the dawn of the oil age, petrol and politics have always been a volatile but inseparable mix and in the case of the US, a central theme of its foreign policy for decades. This raises the question of whether the US administration's position vis-à-vis major oil exporters under George Bush is deteriorating. In the Middle East, relations between the American administration and the world's largest oil reserve holder, Saudi Arabia, are still friendly, but nowhere near what they used to be before 9/11. Ties between the two countries are further threatened by the worsening situation in Iraq which Saudi Arabia sees as a recipe for instability in the region. More than two years after the US-led invasion of its territory, Iraq -- another major oil exporter, is descending further into chaos and its oil production capacity is still considerably below that of pre- invasion levels. Iraqi Shias and Kurds maybe courting the Americans at the moment, but there is no guarantee future governments will sway in Washington's direction once American troops start leaving the country. The Bush administration's relation with Iraq's neighbour, Iran, is no better and reached new lows this week. The United States has lobbied hard to punish Iran for its efforts to develop a nuclear programme. The International Atomic Energy Agency, the UN's nuclear watchdog, censured Iran for its nuclear ambitions and paved the way to refer it to the UN Security Council. Iran had threatened to use oil as a weapon if such a move were taken. A major crisis may have been averted but the diplomatic tussle between the US and Iran is certain to continue and probably escalate in the near future. Closer to home, the United States is in a slow- motion showdown with Venezuela, the world's fifth largest oil exporter and a leading oil supplier to the US. At this stage, oil is too important for both countries to brandish it as a bargaining chip. But Venezuela's president Hugo Chavez is fully aware of the impact oil policies can have on the broader conflict he sees as ones between populist socialist regimes like his and capitalist ones like the US. Last Chavez launched the Petrocaribe initiative, a plan to provide cheap fuel to 15 Caribbean nations in light of the increase in oil prices. The move is seen as a bid to diversify Venezuela's energy ties with neighbouring nations. The overall impact of Venezuela's oil policies and the developments in the Middle East remain to be seen. The US has weathered oil crises before including the famous 1973 oil embargo. But one factor appears to have changed since then. This time around, direct blame cannot be assigned to a country or countries for the oil shocks that are starting to rattle the world economy. Analysts suggest crude oil production from conventional sources has reached its peak or is about to in the next couple of decades. If main oil exporters keep moving away on the other side of the fence in opposition to the US, the black days of oil may even get darker.
