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The import quotas cause all sorts of ruckus abroad. Though the U.S. consumes 55% of the free world's oil. it has only 15% of the free world's reserves, enough to last a dozen years at current production rates. As consumption rises, the U.S. must depend increasingly on foreign oil if it wants to maintain even that slim ration.
The import restrictions cause hard feelings among the very nations to which the U.S. must look for future supplies—the Middle East, Canada. Venezuela. The pro-U.S. revolutionary junta in Venezuela begged the U.S. not to reduce quotas, lest Venezuelans take it as a sign of U.S. disapproval: Import restrictions force such nations to look for new markets that they may not be willing to give up if and when the U.S. needs more foreign oil.
Oilmen, who are legitimately optimistic, feel that the glut will eventually solve itself in both U.S. and world markets. Oil demand in the U.S. alone is expected to rise from about 8.5 million to 14.3 million bbl. daily by 1966; the same men compute free-world demand by then at 28.5 million bbl. daily. In 20 years, says William L. Naylor, senior vice president of Gulf Oil Co., the demand for petroleum should increase at least 80%, and perhaps as much as 100%. Yet before oilmen can enjoy this long-term prosperity, they must first solve their short-term problems. The solution is not so much to caterwaul about imports, or even slack production schedules, but to return to the old-fashioned virtues of a free marketplace in which supply and demand set the price of petroleum products. What the oil industry needs more than anything else is some sharp price cuts to encourage more people to buy more oil.