Petrodollars-The Recycling Problem: Some Introductory Remarks

Whatever the actual size and volume of surplus funds that ultimately accrue to the oil producing countries as a result of the quadrupling of oil prices in late 1973 and early 197 4, there is no doubt that a dramatic and unprecedented shift in financial resources from the oil importing to the oil exporting countries has occurred. This trend will continue for at least the immediate future and probably will not reverse before the end of this decade, when new or alternative energy sources and changes in consumption patterns may begin to show their effects. To be sure, early forecasts on the implications of the oil revolution painted a bleak prospect for the world at large, and particularly for the industrial world. It is now, however, generally accepted that the estimates of amounts involved were exaggerated by many in the early crisis days, and have more recently been revised downward.

These new and more modest estimates are the result of various factors.