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Trends In The Production And Consumption Of Oil
Oil reserves are the quantities of crude oil estimated to be commercially recoverable by application of development projects to known accumulations from a given date forward under defined conditions. oil production is the act of drilling a hole in the earth in the hope of producing petroleum. Consumption of oil is the total oil consumed in barrels per day (bbl/day). The global patterns and the consumption of oil have changed over the past few years. It significantly changed after the industrial revolution started as the oil consumption rapidly increased in various parts of the world.
Trends in production
In 2003 global oil production was at 70 million barrels per day. There are eight countries who are the major oil producers in the world. The major producers are Saudi Arabia, USA, Russia, Iran, China, Venezuela, Mexico and Norway. Many African countries except for Nigeria don’t have oil at all. Nigeria’s economy is rapidly growing due to the oil production. USA produced the most oil in 1971.
Saudi produced the most oil in 2008 and is continuing to produce the most along with Russia. The oil production of Saudi Arabia has been fluctuating. In 1971, it was producing about 250 M. Then the production steadily increased until 1974. However, then the production started decreasing until 1975 and increased again until 1976. Thus, the production kept on increasing and decreasing. Then in the year 1981, the production decreased a lot. It decreased to 150 M which was below than what they were producing in 1971. The production decreased until 1985. After that, the production started increasing although there were draw backs. The production started steadily increasing in the year 2007.
The general global trend for the production of the oil is increasing. The oil production is increasing in South and Central America, Europe, Middle East, Africa and Asia Pacific.
The production most rapidly improved in Asia Pacific. In 1991, they produced approximately 6900 barrels of oil per day however, in the year 2009; they started producing slightly more than 8000 barrels a day. Although their production increased, the number of barrels they produce is still quite low compared to Africa, middle East, Europe and North America.
The oil consumption has been steadily increasing in Africa. In the year 1991, they produced 7000 barrels per day and by the year 2009; they produced just below 10,000 barrels per day.
Although the production has been increasing slowly in Middle East, their oil production of barrels is still high. In 1991, they produced 18,000 barrels per day. It kept on increasing until the year 2004. Then, the number decreased by a small value in 2009.
The general trend is that the oil production is increasing in Europe. However, the increase wasn’t steady or smooth. The production kept on increasing and decreasing throughout the years. In the year 1991, Europe was producing 15,000 barrels everyday and in 2009, they were producing just below 18,000 barrels per day.
North America is an anomaly as the oil production is decreasing whereas it is decreasing for the other parts in the world. In 1991, they were producing 14200 barrels of oil per day. Then, the number decreased steadily until 1999. Then the number rose to 14110 barrels per day and then it constantly decreased.
Trends in consumption:
Countries like USA, Japan, China, Germany, Russia, Italy and France consume over 50 % of the global demand. The demand of oil depends on two things, the population and the development in the country. There is correlation between the oil consumption and level of development in the countries. The more developed a country is, the higher the demand for oil is. Secondly, the more populous the country is, the more oil it needs and consumes for example china has become the world’s second largest importer of oil after USA. US imports the oil from the foreign countries and the majority of the oil comes from Canada, Saudi Arabia, Mexico, Venezuela, and Nigeria. They are one of the largest consumers in the world. On top of that, USA consumes oil in the ration of 1:6 (country: barrels) per day. In the year 2005, the oil consumption decreased because the price of oil was too high. This also affected the supply. The supply decreased as well.
Trends in Oil reserves
2/3 of the oil reserves are in the Middle East, Latin America and then other developing nations. It is predicted that at the present rate of production and consumption, reserves will only last for about 40 years. The countries who have the oil reserves or who are going to have them in the future are going to rule the market in the future. OPEC countries are controlling the price of crude oil. Once they control, they get economic and political power because the oil reserves are in the Middle East. All the oil consumers want stability in the Middle East because any disruption can cause the supply of oil to decrease. The dependency in oil is increasing in the world. One of the many repercussions is that all countries want good political relations with the Middle East. Many countries that do not don’t have access to oil will have to invest in other methods such as solar energy.
The general trend for proven reserves is decreasing in North America. The number of reserves decreased rapidly between 1990 and 2000. Then there was a period of small increase between 2000 and 2007. Then again, the number of reserves decreased in 2009 and increased back to 78 in the year 2010.
In South and Central America, the oil reserves have generally increased over the past few years although the path is quite fluctuating. It sort of exponentially increased from 1989 to 2006. However, then there was a great fall in the year 2009 where the number of reserves fell from 200 to 25. However, then there was a rapid increase in the year 2010 where the number was close to 200 again.
A very similar scenario happened with South and Central America where the oil reserves have generally increased over the past few years although the path is quite fluctuating. It sort of exponentially increased from 1989 to 2006. However, then there was a great fall in the year 2009 where the number of reserves fell from 200 to 25. However, then there was a rapid increase in the year 2010 where the number was close to 200 again. Asia and Africa follow a similar trend.
In the Middle East, the general trend is increasing. The number of reserves in 1987 was quite high. It was 650. Then there was a slow increase. It reached 750 reserves per 2008. Then in 2009, the number of reserves decreased down to 100. Then, there was a rapid increase and there were about 750 reserves in the year 2010.
Oil leads to development in transportation and help develop the economy as oil boosts the economy. World population increased in 2008 and oil became expensive. 85% of the world’s energy was provided by fossil fuels. The world became heavily dependent on oil. Since the population was increasing, the demand started increasing as well. There was fear of shortage. Thus, the price started rising and US dollars declined. Oil affected food supply because fear of shortage and increasing price of oil caused people to produce bio-fuels. In 2009, 1/3 of the corn output was utilized to make 9.3 billion gallons of ethanol. Since a lot of corn was being used for ethanol production, there was less corn left for the increasing population which led to the food crisis. As a result, price of corn increased. Then due to global warming and natural disasters, there was less supply of crops (food) to cater to the world’s increasing population. This affects the quality of life and the standards of living. Since people couldn’t pay their average variable cost since the cost of living increased, the unemployment rates increased as well.