U.S. Policy and Action Toward Central Asia and the Caspian Sea Countries John Lichtblau This paper will focus on the oil aspects of the Caspian Sea projects and developments. There is obviously a very significant interest on the part of the U.S. from the oil point of view. It is well known that the U.S. is the world’s largest oil importer and as a super power we are interested strategically in that area. About 50% of our oil is imported and all projections show that our oil imports will rise perhaps 60% ten years from now. I think the administration has accepted that fact. There is still talk at Congressional hearings that we have to do something about our oil import level, that we have to cut it in some way. But this gets to be less and less convincing. After all, 50% import dependency is a lot less than Germany’s 95% or Japan’s 100% and these countries are not exactly suffering. It is thus tolerable, but it requires government planning and strategy and this is where the Caspian Sea comes in, because it is an important new supply source. If one has to depend on foreign oil, the best way of making the dependency less risky is by continuous diversification of supply sources and not just for oneself, but on a global basis. The U.S. actually has substantially reduced its import dependency from the Middle East and increased its imports from Western Hemisphere sources significantly. That is logistically meaningful, but strategically it is not, because if there is any disruption in the Middle East, we would be just as much affected by it even though our imports from that area are very small. Also affected would be Japan or Germany or any country that is totally dependent on the Middle East. There is a single world oil market and anything that affects that market, affects all customers. So diversification of supply sources has been one of the U.S. basic policies in our import program and our import policy over the years. This was discussed at a recent Department 67