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Sunday, September 23, 2018

World oil supply and demand


Over the last 12 years oil demand has increased by some 12 mbd. During the period 1993 to 1997 the average growth rate was 2.1%, 1998-2002 1.1%, 2003-2005 2.3%, and the International Energy Agency (IEA) is assuming 2.2% growth rate in 2006. China has clearly the highest growth rate for the whole period of 6.9% peaking in 2003/04 with 12%/14%.

China is still a relative midget in the oil market but with an oil demand per capita that is still just a small fraction of the oil demand per capita in the developed world, there is, of course, huge potential for growth. China is relatively energy-inefficient, but now seems able to get a better grip on the supply of electricity, which accounted for a great deal of its oil demand in 2004. It has also improved its coal supply, according to Chou Dadi from the Chinese Energy Research Institute. 

Turning to the supply side, oil production in the Americas has been steady over the same 12-year period despite the strong decline in U.S. oil production. In Europe production increased up to 2000, but since then has been declining - most strongly this year. Oil production in the Pacific is also declining although in China it is holding steady.  

Elsewhere, it is only OPEC and the Former Soviet Union (FSU) that have increased oil production. After a relatively steady period 1994 to 1998, the FSU increased oil production by 4.3 mbd up to 2005, and the increase for 2006 is projected to be 0.5 mbd. The OPEC countries have been the big contributors to the growing world oil supply and have increased production by some 7.8 mbd since 1993, of which almost 2 mbd has been NGLs. The biggest increase in OPEC has come from Iraq, which has increased oil production by some 1.5 mbd over the period, then Saudi Arabia by 1.3 mbd and Libya by 1.1 mbd. 

Contact: Erik Ranheim