Big Oil gets our oil supply mainly from areas of high volatility. Are big returns from Big Oil worth the cost of investing in the world's regions most unfriendly to the U.S.? Attacks Tuesday from Nigerian rebels (Movement for the Emancipation of the Niger Delt a – MEND) in which three oil pipelines were blown up continue to underscore the vulnerability of the world's oil supply. Reuters reports that even though production has been affected, there are hopes that Niger Delta operations will continue in the future:

"Production through the Brass (Eni – ENI ), Forcados (Royal Dutch Shell – RDS-B ) and Escravos (Chevron – CVX ) terminals have all been affected since disruptions started and hopes that capacity could recover quickly following the April elections now appear to have been optimistic," Citigroup said.

Nigerian Energy Minister Edmund Daukoru told Reuters he was optimistic Shell would resume exports from its Forcados oilfields next month. He predicted violence in the Niger Delta would subside after new president, Umaru Yar'Adua, takes office. "Once the new administration is sworn in and gets engaged with the problem, I think it will die down," Daukoru said.

But will the Niger Delta really settle down? Whether or not it does, the frequency of attacks in the Niger Delta in the past weeks forces us to examine the benefits of continuing to invest in Big Oil, and the perils involved in relying on the world's oil supply for our energy needs. The world's current top oil producers are Saudi Arabia and Russia, according to the CIA. Hardly the recipe for stability. And, while the CIA lists the largest oil reserves in Saudi Arabia and Canada, the runners-up include such countries as Iran, Iraq and Venezuela. It is worth noting that the Orinoco Belt in Venezuela is garnering a great deal of interest in its oil reserves, and may soon be considered the location of the world's most extensive oil fields. None of these countries is particularly friendly toward the U.S., and they could be potentially unstable in the coming years (Iraq already is). Most of our oil supply comes from the world's most volatile regions.

Alternative energy and biofuels are beginning to offer interesting investing options. While Big Oil still offers larger returns on a whole, the power of more people investing in alternative energy, and in companies and products that work to reduce our dependence on foreign oil could help turn the tide. But for now, it is important to consider the costs of continued investment in Big Oil.

More oil supply facts from www.cutoilimports.org.

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