Off Peak

Et Tu, Mexico?

A consultant questions whether our trade partner's role in organizing cutbacks in world oil production is consistent with NAFTA obligations.

 

In the last nine months of 1999, the outflow of U.S. dollars for imported oil increased by $18.6 billion from the same period in 1998, according to figures from the Energy Information Administration at the Department of Energy.

From the gas pump to the refinery, U.S. consumers and businesses are feeling the pinch of cutbacks in OPEC oil production. Crude prices hit a nine-year high of nearly $32 per barrel in early March, up from about $10 per barrel a year earlier. Glenn R. Schleede, president of Energy Market & Policy Analysis Inc., blames our neighbor to the south in large part for the tightened oil supply.

In fact, as Schleede notes in a Feb. 18 letter to Energy Secretary Bill Richardson, our NAFTA partners are among countries most benefiting from increased U.S. dollar outflows for oil. Canada, the No. 1 beneficiary, reaped 14.4 percent of the U.S dollar outflows for oil imports from April to December last year, while Mexico, the No. 4 beneficiary, had a 12.0 percent share of the outflows.