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Issues Regarding Imposition of an Oil Embargo Against Nigeria.
GENERAL ACCOUNTING OFFICE WASHINGTON DC GENERAL GOVERNMENT DIV
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While a multilateral oil embargo could have a significant economic effect on Nigeria, there is currently little international support for such an action. According to our analysis, a comprehensive, effectively enforced multilateral embargo on Nigerian oil would have a devastating effect on Nigerias economy because 96 percent of its projected 1994 foreign exchange earnings is expected to come from oil exports. If completely successful, an embargo could potentialiy reduce world oil supplies by 1.6 miffion barrels per day if there were no increase in production from other sources. Such a reduction in supplies could rapidly increase world petroleum prices by as much as 2 to 5 per barrel, or by about 5 to 12 cents per gallon of gasoline at the pump. U.S. petroleum and gasoline prices could experience a similar increase. However, Department of Energy analysts believe that any shortfall resulting from an embargo would be offset by other nations increased oil production, and thus there would be little or no effect on oil prices.
APPROVED FOR PUBLIC RELEASE