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In a forward-looking commentary in today's Washington Times, Richard Rahn explains the distorting factors in the global petroleum market; namely that there are too many inefficient governments in control of oil resources. Ã‚Â Rahn writes:
Most people do not realize that about 90 percent of the world's liquid oil reserves are controlled by governments or state-owned companies. Exxon Mobil, the world's largest privately owned oil company, owns only 1.08 percent of the world's oil reserves, and the five largest private global oil companies together own only about 4 percent of the world's oil reserves.
And those state-controlled reserves are poorly managed by (often corrupt) bureaucracies:
Most of these countries and other major oil producers that rely on mainly state-owned companies, such as Russia, have underinvested in exploration and development of new production facilities and mismanaged the ones they have. (If politicians understood the facts and were truthful, they would rant against "greedy" socialists rather than private oil companies.)
That last point about our political class is important-- if you are looking for someone to "blame" for high oil prices, look no further than the governments of Russia, Mexico, and most of the OPEC producers like Venezuela.