IMPACT OF INCREASED OIL PRICES ON THE LESS DEVELOPED COUNTRIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001900010181-7
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 11
• Document Creation Date: December 19, 2016
• Document Release Date: May 23, 2006
• Sequence Number: 181
• Publication Date: February 14, 1974
• Content Type: STUDY

 25X1
AppO
IoveWPOOVV&Use~~6/d26 RUlA DP85T00875R0019Q
were furnished to supplement the
The attached statistical tables
14 February 1974
Chief,-Near East Africa Branch.
Developing Nations Division
IV AUG+ SA Iql . WHICH REPLACES FORM 1-101
1 -
1 -
1 -
1 - R
0 1'- SA/ER
1A gr/ E
1 /NE
OER/D/NE:
13.February 1974)
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;:; Office .of. Economic Research
-
001'0181 -
 Approved For Release 2006/09/26 : CIA-RDP85T00875R001900010181-7
Impact of Increased Oil Prices on the
Less Developed Countries
Statistical Tables
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25X1
 IEENiIIAL
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World Primary Energy Consumption
1972
? Source of Enerav
Petroleum
Natural Gas
Solid Fuels
Water Power
Nuclear
Total
Developed
Countries
Utilization of Energy
Petroleum (100%)
Natural Gas (100%)
Solid Fuels (100%)
Water Power (100%)
Nuclear (100%)
83.3
92.9
83.6
82.1
97.6
a. Excluding USSR, EE, PRC
a/
-,:.: i ~ is ;l.
LDC
LDC
Latin !',Terica
Africa, Asia
57.7
14.9
6.3
-?.6.1
34.3
5.0
1.6
0
.1
7.3
9.4
4.2
2.9
1.6
14.8
11.8
6.1
0
2.4
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 -,Approved For Release 20060kM:_CIA-RDP85TU0875R001900010181-7
WORLD OIL CO;.ISL,;t'TIO.1
_Developed._-.___ .
-..--i- - - -~;-,; -rte -Countries' - ----t
-------------
! Excludes USSR, E Euro e' PRC
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The Structure of
Oil Price, 1 January 1974
Persian Gulf
Nigerian
Libyan
Crude
Crude-
Crude
1. Posted Price a/
11.65
14.69
15.77
2. Productioii Cost
.10
.35
.30
3. Government Revenue
..
7.01
8.73
9.49
Of which:
Royalty (for most countries
1.46
1.84
1.97
12.5?. of 1)
Profit Tax (for most countries 5.55
6.88
7.52
55`s of (1-(2+Royalty)
?
4. Estimated oil Company Profits
.50
..50
.50
Estimated Sales Price f.o.b.
(2+3.4)
7.61
9.58 .
10.29
E t' t ~~ `'rans ort rngt to
D iL...a e p
US Gulf Coast
1.48
??
.67
.65
Estimated Sales Price a..f.
-
US Gulf Coast
9.09
10.25
10.94
Venezuelian
Cruz
13.67
.51
3.51
2.23
6.31
.46
10.06
a. Difference: in posted pi ces reflect differences in oil quality and transport cost::.
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Less
(E::rn~r...s sorts C!_ )
(Billions US S)
1971
1972
1973 a/
Developed
E::ports
252.8
300.3
351.8
Countries
Imports
264.9
314.6
372.3
Balance
-12.1
..
14.3.
20.5
Less
Exports .,
60.9
72.1
82.4
Developed
Imports
64.1
?'71.4
78.6
Countries
Balance
-3.2
.7
3.8
Less
- Exports
39.9
48.3
57.0
Developed
Imports
51.2
56.3
60.6
Countries
Balance
-11.3
-8.0
-3.6
(Excluding
Exporting
Countries)
Oil -
Percent'Change from Preceeding Year
Developed -
Exports,.
18.8
17'.1
?
Countries
Imports 11.
2
18.8
.3
18
Less -
Exports 12.
2
19.4
14.3
Developed
Countries .
Imports 13.
9
?11.4
10.1
Less -
Ey.ports 4.
7
21.1
18.0
Developed
Imlports 19.
1
10.0
7.6
Countries
(Excluding Oil
Exporting
Countries)
a. First quarter, annual rate.
~!'.Y i. -. b 1. (.1? L.. J 1. 1.1
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Balance c0_ Trade Projections, 1974
(Billions US $)
?Ui/{'.1
Option B
price reduction
normal growth
demand reduction
price increase
normal growth
supply reduction
-- 15% 'price increase
8% normal growth
- 15% price increase
- 1000- growth
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Option A Option B
1974 1974
Petroleum a/ .
11.1
Petroleum
Derivatives: b/
6.1
.9.2
9.9
Other imports
49.3
56.7
61.2
Total Imports
60.6
77.0
83.0
Exports
57.0
68.9
72.1
The two options represent a possible range of aggregate im-
ports and exports by oil-importing LDCs in 1974. The assumptions
in i-:ach option are:
Imports
Petroleum
-15% price reduction
-15%
- 5% demand reduction
8%
5%
Petroleum
-100% price increase
-100%
Derivatives
-. 25% _supply reduction
- 8%
25%
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'Tolerable' Rduction in
Oil Consumption
C
t
Non-Industrial Oil Requirements Possible
Percent
Possible
oun
ry
Use of Energy
Energy Re
uir
t
-'
q
emen
s
Energy Savinqs Oil Savin
Peru
Si
25
85
4
0
4
7
nganorc
P
40
95
.
5.2
.
5
5
araguay
I:
50
84
6.0
.
7
1
orea
A
30
56
4.4
.
7
9
rgentina
Chi
50
76
6.0
.
7
9
le
'
i'?
32
58
4.6
.
7
9
,
~:
:an
:
i
44
66
5.5
.
8
3
cr
'?
co
45
63
5.8
.
9
2
a::i 1
'
40
46
5.2
.
11
3
I
t:i_ip! ires
I
l
80
60
8.8
.
14
7
?:a
aysia
65
45
4
8
.
18
6
South Vietnam
85
35
.
7.2
.
?20
;
Thailand
CF
mh
di
80
30
7.6
.
25
3
:
c
a
I`
r
i
85
2
7
2
.
28
3
a
:
Stan
L
88
30
.
9.4
.
31
3
aos
'
85
20
7.2
.
36
0
(Z
. S. ;
62
45
6.9
.
15
3
(Japan)
45
75
5.5
.
7
3
(OECD Europe)
55
62
?6.4
.
10.3
ssume
to affect the
pro
d
uc
i
t
ve apparatus of the economy. The 'tolerable'
duction?is directly proportional to the share of non-industrial uses in total energy
requirer.:ents and inversely proportional to the share of oil in total primary e:ierg;y re-
quirements . .
I
Note: A 'tolerable reduction in energy use is defined as a?2 percent energy retiuctic in
the industrial sector and a 10 percent reduction in the non-industrial sector. Any further
reduction is a
d
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V.?~L~ ~-r r ~i1 !I7 J
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I'TiG~ II1C1~'F::,=~' In LDC
T.nilual Parccnt G: ;:?ce in Cons.;::,
r ^~
? ~
Prices
1.9G5-?0
19G9
1970 1971
1972
1?7~
Develore~ Courtri cs 1/
?
4.1
4.8
6.0 5.5
4.5
U
G . 0-
_
Less Developed Coy:ntr. ies 2/
11.8
9.1
~
10.5
. 10.2
14
7
:I/A
..
. ,.
.
Africa ; ~
5.7
6.'0
4.5 :5.2
5.0
N/~
Asia .' ~ ~;'~' ~
10.7
6.1
9.3 ~~ ~ ?6.6
8.2
N/A
? Middle East
3.0
3.4
~;.0 6.2
7.2
N/a
Latin?Ar,Ierica
18.8
15.8
17.0 ?8.0
29.4
N/A
a. First half
1, P;~ights are' proportio:al to GP:P.
2. j?7eights are proportional to imports in 19G8.
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 ' Approved For Release 2006/09/26 :~,CIA-RDP85T00875R001900010181-7
? i ~ ~ ?~ ,
,.,,
Impact on Less Develop~ci Countries
CIA/OFR
'. 13 February 1974
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