Possible Crises & Oil Supply Disruptions in the Persian Gulf 1998-2010

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In this proprietary study undertaken for the Petroleum Energy Center of Japan's Ministry of International Trade and Industry (MITI), IFPA examines the future global oil market and potential shocks to that market caused by possible crises in the Persian Gulf. A companion piece, undertaken by Energy Security Analysis, Inc. (ESAI), of Boston and Washington, D.C., analyzes the implications of such shocks for Japan's oil policy. After reviewing the political-military dynamics of previous disruptions of the flow of oil in the Persian Gulf, the study:

• Examines political and military developments in the region and their implications for future security.
• Forecasts global political-military developments and how they might affect the region.
• Presents and analyzes possible crises that could cause oil-supply disruptions in the Persian Gulf over the next decade.

These hypothetical cases are designed to provide analysts and policy makers with a context for thinking about how political and military crises could develop in the Persian Gulf; they also establish a framework for evaluating energy security policies that address the effects of events in the region. The notional crises presented in the study form the basis for an examination of how today's and tomorrow's energy markets might react to a major disruption in the flow of oil from the Persian Gulf. The overall study, of which IFPA's work is a part, examines how current oil crisis management mechanisms would function, and lays out the implications for Japan's current oil policies.