United States petroleum exports to the participating countries during January to September 1947 by products are shown in table 13.

TABLE 13.-United States exports of crude oil and liquid petroleum products, to participating countries and total exports, January-September 19471

Under the export-quota system introduced by the United States in 1947, the total quantities of controlled products (aviation gasoline, motor fuel, kerosene, gas and distillate fuel oil, and residual fuel oil), shipped to the participating countries during the last quarter of 1947 were considerably below the rate at which these products were exported during the first 9 months of the year. The export quotas of the participating countries for the fourth quarter of 1947 are listed in table 14.

TABLE 14.-United States quota for the exports of petroleum products to participating countries, fourth quarter 1947 1

15.

The export quota for the period January 1 to March 31, 1948, is shown in table While the total quota for the export of controlled products during the first quarter of 1948 is somewhat higher than the quota for the last quarter of 1947 due to the inclusion of quantities for Japan and the Ryukyus, the quantities allocated to most of the participating countries are somewhat lower. It should, however, be pointed out that 2.2 million barrels of the 8.8 million barrels listed as the quota of other countries are held in reserve, and some part of it will probably go to the participating countries not specifically included in the quota. TABLE 15.-United States quota for the export of petroleum products to participating countries, first quarter, 19481

The downward trend of United States oil exports to Europe is expected to continue in 1948. Assuming some reduction in the present export quotas and allowing for shipments of noncontrolled products at a rate somewhat below that of 1947, total shipments of liquid petroleum products to participating countries in 1948 have been estimated at 35 million barrels, over 15 percent less than the United States oil exports to participating countries during the first nine months of 1947 and about 40 percent less than the total for the year 1946. In 1951, United States exports to participating countries are estimated to decline to about 15,000,000 barrels, consisting by that time mostly of lubricating oils, aviation gasoline, and special products. Whereas the United States, therefore, supplied some 30 percent of the total oil import requirements of participating countries in 1938 and 26 percent in 1946, the corresponding rate is expected to decline to 11 or 12 percent in 1948 and to about 3 percent in 1951. Shipments from the United States will amount to an estimated 25 percent of oil imports of participating countries from dollar sources in 1948 and 8 percent in 1951.

The value of United States petroleum exports by products to the participating countries as a group and total exports in 1938, 1945, and 1946 are shown in table 16.

TABLE 16.-Value of United States exports of crude oil and liquid Petroleum Products to participating countries and total exports, 1938, 1945, and 19461

The value of United States petroleum exports to the various participating countries and total exports in 1938, 1945, 1946, and January through September 1947 are shown in table 17.

TABLE 17.-Value of total United States exports of crude oil and liquid petroleum products, to participating countries and total exports, 1938, 1945, 1946, and January-September 1947

(a) During the period of the European recovery program the United States will be a net importer of oil and will depend for an increasing part of its requirements on sources outside the United States. By 1951 the United States will probably be the largest oil-importing country of the world, importing for its domestic needs nearly as much as the three largest European oil-importing countries-the United Kingdom, France, and Italy combined-or about 60 percent of the total imports of all participating countries and their dependent overseas territories during that year.

(b) The United States will nevertheless continue to export sizable quantities of petroleum products (mainly lubricating oils and special petroleum products) because it possesses the refining capacity and skill necessary for their manufacture and because the United States oil industry has established firm market outlets for its products in every country of the world. Very little, if any, fuel oil will be exported. On the other hand, the United States will import large quantities of fuel oil.

(c) It is estimated that United States exports to the participating countries in 1951 will account for about 4 percent of their import requirements as compared with 30 percent in 1938, 26 percent in 1946, and 11 percent in 1948. In absolute quantities, it is estimated that United States exports to the participating countries will decline from the 1938 level of 77,000,000 barrels and the 1946 level of 59,000,000 barrels to 35,000,000 barerls in 1948 and 15,000,000 barrels in 1951. (d) In percent of United States production, shipments to participating countries will account for 1.8 percent of United States crude-oil output in 1948 and for 0.8 percent in 1951 as against 6.4 percent in 1938 and 3.4 percent in 1946.

(e) The bulk of the dollars estimated to be needed by the ERP countries for the imports of oil must be spent for the purchase of oil controlled by American companies outside the continental United States.

(f) The United States will compete with the participating countries for supplies from Western Hemisphere sources, and probably to a limited extent from Middle Eastern sources.

(g) On the basis of the executive branch estimates, total oil requirements of the participating countries after the end of the recovery period will be less than one fifth of those of the United States and the oil consumption per capita will be 10 percent of that in the United States.

VII. QUANTITIES AND VALUES OF DOLLAR AND NONDOLLAR OIL IMPORTS INTO EUROPE

As mentioned in section IV, the production of petroleum in the participating countries is expected to remain unimportant during the 4-year period. Very limited quantities of shale oil and liquid-petroleum substitutes, such as benzol and tar oils, will be used, but the contribution which indigenous production of all liquid products is likely to make to supplies will be less than 5 percent of total requirements over the period. The bulk of European petroleum requirements must be imported from nonparticipating countries.

Production, refining, and exports of the major producing areas are handled almost exclusively by American and British oil companies. These companies also own a sizable part of the world's tanker fleet and through their local subsidiaries they distribute the bulk of the petroleum needs of the various countries. Only very limited supplies are thus likely to be exported to participating countries from sources not controlled by American or British oil companies. With a few minor exceptions, the imports of all the participating countries can therefore be divided into imports of oil produced by American companies and oil produced by British companies.

The estimates for imports in the CEEC report are in general broken down into dollar oil imports and nondollar imports, the latter including "imports from participating countries," "imports from own sources" and "imports from other sources." The CEEC has prepared this break-down on the basis of the market share in the oil trade of American as against other oil companies in the various participating countries. The term "dollar oil" therefore refers to oil marketed by American companies in participating countries, wherever it might have been produced, and is not limited to oil supplied by American companies from the United States.

"Oil imports from participating countries" refers in practically all cases to imports by British oil companies, irrespective of the source of the oil. "Imports from own sources" means imports obtained from foreign concessions owned by the participating country, such as the British oil concessions in Iraq, Iran, Venezuela, Kuwait, etc., and the French share of the concession in Iraq. "Imports from other nondollar sources" such as from Rumania, the U. S. S. R., etc., are negligible.

To meet their requirements as estimated by the United States, the participating countries will drawn on indigenous production, imports from dollar sources and imports from nondollar sources, as indicated in table 18.

TABLE 18.-Petroleum supplies of the participating countries and their dependent overseas territories from domestic production and from dollar and nondollar sources, fiscal 1949 to fiscal 1952

1 CEEC estimates refer to calendar years 1948 to 1951. 2 The CEEC estimates for indigenous production are higher than those of the United States largely because the CEEC report included total Austrian crude-oil production on the assumption that it will be available to and consumed in Austria, whereas the United States estimates excluded that part of Austria's production which is likely to be in excess of Austria's minimum domestic requirements and will probably be exported to nonparticipating countries.

* Supplies exceed requirements by the amount of refining losses incurred and by the volume of the reexports of some marginal quantities of refined products.

The break-down of supplies between dollar and nondollar sources in the executive branch estimates has in general followed the pattern established by the CEEC figures.21 With the information presently available it was not possible to analyze and examine the break-down between dollar and nondollar oil, country by country and product by product, for the 4-year period. On an over-all basis, however, a preliminary analysis seems to confirm that the dollar-oil element in general represents the historical share of American companies in the European market. On an individual-country-and-product basis, this observation may in some cases not hold true. It is obvious that the United States agency administering the recovery program must, in each instance at issue, consider the effect which the financing of oil imports must have on the established business of American companies. The figures for the size of the dollar-oil needs given in this report can serve to establish only the approximate order of magnitude of the dollar deficit of the participating countries as a result of their oil purchases from American companies."

The quantities of dollar and nondollar imports by countries are shown in table 19.

cee Appendix 1 for a "Note on the CEEC definition of dollar oil."

The break-down of ERP supplies into imports of dollar and nondollar oil on the basis of the market share of American as against non-American companies may in some instances and for some products lead to a shortage of dollar oil and a surplus of nondollar oil or vice versa. In particular it is possible that part or all of the deficit shown by dollar companies in the case of heavy oils could be made up from nondollar sources and dollar companies may have a surplus of certain light products of which nondollar companies may be short (see section VI). No adjustments have been made in these estimates for such or any other intercompany exchange of products. The net effect of all such transactions on the total balance of payment is believed to be small.