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My question about the oil situation is this:
1) 10 years ago, we went to Kuwait to save them from Iraqi takeover.
2) At the same time we have been saving the collective butt of the House of Saud from takeover by the lunatic fringe of their "sacred" religion.
3) Now we're in the process of delivering Iraq from a despot.

Will OPEC continue to "hold us hostage" with their collusive monopoly on world oil or will we see any favors for our efforts?

We aren't asking for favors. We only ask for free trade at market prices. If we seek or receive any special tretment, the world will scream we went into Iraq for the oil. The administration has to balance economic policy w/geopolitics.

Oil is flowing across the world. It is fungible: it doesn't matter where it's from as long as it can get to where the money is to pay for it.

If the pubs can continue to play regional vs party interests in Congress, we will get an energy bill. If not, we can elect more pro-domestic production folks to Congress next year and then get an energy bill.

So far, things appear to be working in our favor, but that's JMHO.

As regards oil production, they will continue to act rationally from their perspective. To wit, they will seek to maximize (cost per barrel * number of barrels sold). If anybody is doing the west a favour at the moment it is the Russians with their ever increasing oil exports (soon to overtake Saudi, I believe).

These figures are a year old now but still representative. Please compare the 2001 GDP Per Capita (Unadjusted USD) to Annual Per Capita Oil Income (Unadjusted USD) to see how important oil is to each OPEC economy. If the price fell to its long term trend value of $10USD per barrel most of the economies in the Middle East would collapse into civil war.

In 2001, according to "Statistical Review of World Energy June 2002" by British Petroleum global oil production was 74.5 MBPD (million barrels per day, a barrel is 159 liters). Of this, 30 MBPD (40.7% of the total) was produced by the OPEC countries.

Table 1: OPEC Countries and their Incomes

Country	Date Joined OPEC	Location	2001 Oil Production (MBPD)	2001 Oil Production (% Of World Total)	2001 Population (Million)	2001 Total GDP (Unadjusted MUSD)	2001 GDP Per Capita (Unadjusted USD)	National Oil Income (Unadjusted MUSD)	Annual Per Capita Oil Income (Unadjusted USD)	2001 GDP Per Capita (PPP-USD)
Saudi Arabia	1960 *	Middle East	8.768	11.8	22.8	186,489	8,179	80,063	3,512	10,600
Iran	1960 *	Middle East	3.688	5.1	66.1	114,052	1,725	33,676	509	6,400
Venezuela	1960 *	South America	3.418	4.9	23.9	124,948	5,228	31,211	1,306	6,100
Iraq	1960 *	Middle East	2.414	3.3	23.3	NO DATA	NO DATA	22,043	946	2,500
United Arab Emirates	1967	Middle East	2.422	3.2	2.4	NO DATA	NO DATA	22,116	9,215	21,100
Nigeria	1971	Africa	2.148	2.9	126.6	41,373	327	19,614	155	840
Kuwait	1960 *	Middle East	2.142	2.9	2.0	32,806	16,403	19,559	9,780	15,100
Libya	1962	Africa	1.425	1.9	5.2	34,137	6,565	13,012	2,502	7,600
Indonesia	1962	Asia	1.41	1.9	228.4	145,306	636	12,875	56	3,000
Algeria	1969	Africa	1.563	1.8	31.7	54,680	1,725	14,272	450	5,600
Qatar	1961	Middle East	0.783	1	0.77	16,454	21,369	7,150	9,285	21,200
TOTALS			30.18	40.7	533	750,245		275,590

Sources: List of OPEC countries from OPEC - (*) indicates a founder member . Population figures and PPP GDP estimates from the CIA World Factbook via theodora.com. The unadjusted GDP figures are from the World Bank. The unadjusted GDP per capita is calculated by dividing total unadjusted GDP by the population. Oil production figures are from BP; please note that there are slight discrepancies in some of the percentages; Indonesia has a higher % than Algeria, but a lower MBPD figure, likewise Iraq vs. UAE. I am awaiting corrected data from BP. The errors are slight and do not affect conclusions drawn.
Populations: Several OPEC states have large populations of non-nationals. The population figures above include 5.4 million non-nationals for Saudi Arabia, 1.6 million for UAE, 1.2 million for Kuwait and 0.66 million for Libya. These populations have been included when calculating the GDP per capita figure.
National Oil Income USD: This figure is calculated using the formula Income = Production_in_MBPD * $cost_per_barrel * 365.25. Cost per barrel is set at $25, in line with recent oil prices. Since extraction costs are ignored, the result actually inflates the oil income slightly. The over-estimate is minor for the Gulf states, where extraction costs are $2 to $3 per barrel, but rather more for non-Gulf countries. No allowance has been made for export of refined products rather than raw oil - refined products are more valuable than raw oil. Also, no allowance has been made for domestic consumption. Dividing the figure in this column by the population gives the per capita oil income.

I have highlighted the countries where oil income per person is at a level which I consider significant from a Western perspective.

Kuwait, UAE and Qatar stand out as societies that generate truly impressive income per person, even by Western standards, however they all have tiny populations. Indonesia, Iran and Nigeria have large populations and correspondingly small incomes per person. Saudi Arabia stands out for combining a moderate population and high oil income, fulfilling its reputation as the 800 pound gorilla of OPEC. Opinion varies as to what is the "natural" market price of oil, i.e. what would the average price be if the international market were fully efficient and free from the distorting impact of OPEC. A figure of $20 is often mentioned, yet the oil price was as low as $10 as recently as 1998. If $10 pertained, then these figures would need multiplying by 0.4. Such a factor would leave only Kuwait, UAE and Qatar as having a significant per-capita oil income!

One figure not shown in the table is population growth rate, but all the countries have positive population growth. The Gulf States have some of the highest rates in the world - 2-5% - their populations will double in about 20 years at such rates, and all other things being equal their oil income per person will therefore halve during that period. This is not a new trend, it has been in place for many years. Historical data is hard to come by, but Iran's oil income per person income in 1995 was less than 10% of what it was in "the boom years" of the 1970s. According to The Economist's survey of the Gulf Cooperation Council countries, Saudi Arabia's GDP per head is now half its 1980s peak. This combination of rising populations and declining oil prices constitutes a severe, ongoing and worsening problem for the OPEC countries.

The per capita incomes for Iran and Iraq are notably low, given the prominence these two countries usually receive as "oil titans". The Iranian figure of $509 is so low as to make it debatable whether Iran should be considered a petro-economy at all. Iraq's production could well double in the next decade as sanctions are lifted, modern technology is introduced and the country seeks to rebuild, but this will still not propel the country into a sybaritic life of pleasure and ease.