World Petroleum Trade Balance

Summary

The industrialized world consumes far more petroleum than it produces, with the vast majority of it imported from the Middle East. While the largest net consumer of oil in the world in 2000 was the United States, a combined Europe and Japan consume and import (net of exports) even more oil than the United States. In future decades, China’s voracious consumption of oil is poised to dramatically increase. Russia will begin to rival many Persian Gulf states as a key source of surplus oil supply in the world, and will continue to benefit from a large influx of oil income.

Because the market for petroleum is worldwide and highly efficient, it is close to impossible for any country to insulate itself from political instability in the world’s dominant oil-producing region: the Middle East. Even if a country does not import a single drop of oil from the Middle East, any disruption in that volatile region dramatically affects the price of oil everywhere else in the world.

For decades to come, steady oil prices and availability will be directly dependent on a stable Middle East, a fact of particular interest to large consumers of petroleum like the industrialized world. Cheap and plentiful oil is a critical factor in allowing the world’s economies to regain and maintain robust economic growth. The pursuit of alternative energy sources, purchases from non-Middle Eastern sources, or drilling in wildlife refuges will do little to alter the power that Middle Eastern oil has over the world’s economies. It costs so little for the Gulf states to produce oil that they will retain this economic power as long as petroleum is used to any significant degree, anywhere in the world.

Main Insights

  • The United States is, by far, the largest consumer of petroleum in the world. The US consumed approximately 19 million barrels per day in 2000, accounting for 25% of the world’s total consumption. However, the country produced only 7 million barrels per day (10% of the world total), creating a net import need of more than 12 million barrels per day–most of which was used to fuel motor vehicles. This import need is the largest in the world, equal to 15% of total world oil production and more than twice as great as the net oil needs of Japan.
  • The second largest consumer of oil was Japan, whose consumption was equal to 7% of the world’s total. Unlike the United States, Japan produces an extremely small amount of petroleum on its own and is forced to import virtually all of what it needs.
  • The countries of Europe made up 21% of the total world’s oil consumption, but they produced only 9%. 85% of European production came from just two countries: Norway and the United Kingdom. France and Germany combined consume 6% of the world’s oil but produced virtually none.
  • The largest producer of oil in the world was Saudi Arabia, which pumps more than 8 million barrels per day or nearly 12% of the world’s total. The United States was the second largest producer in the world (10%), Russia was third (9%), Iran was fourth (5%), and Mexico was fifth (5%). Other leading countries were Venezuela, Norway, China, Canada, and the United Kingdom.

Other Observations

  • China was the third largest oil consumer in 2000 (6.5% of the world total), Germany was fourth (3.6%), and Russia was fifth (3.2%). Altogether, the United States, Japan, China, Germany, and Russia made up 46% of the total world consumption of oil. Other major consumers were South Korea (2.9% of the world total), India (2.7%), France (2.6%), Italy (2.6%), and Canada (2.6%). The top ten oil consuming countries account for 59% of the world’s total.
  • The Middle East represented 7% of the world’s oil consumption, but contributed 30% of the world’s total production. Asia was almost the reverse, constituting 27% of total consumption but just 11% of total production.
  • The top five oil consumers accounted for 46% of total world consumption, while the top ten accounted for 59% . The top five oil producers accounted for 41% of total world production while the top ten producers composed 62%.
  • The top ten net importers of crude oil were the United States, Japan, Germany, South Korea, France, Italy, China, Spain, India, and the Netherlands. Considering the interests these nations have in the Middle East, it is surprising that only three of them, the United States, Great Britain, and France, have deployed any significant ground forces to defend the oil fields there since World War II. Great Britain has often sent troops to the region, but interestingly, it is one of the few European countries that is not currently dependent on foreign oil imports due to its North Sea oil fields. In many respects, British troops have lately been protecting French, German, and Italian oil supplies more than their own.

Sources and Methodology

The source data for this cartogram is based on information provided by the international oil firm, British Petroleum. Each year, this company provides a comprehensive survey of world energy market, including very detailed data sets concerning crude oil production and consumption. The data set used is for the year 2001. The data has also been compared to similar values published by the Oil and Gas Journal in the same year, to check for general accuracy and consistency.

In some cases, oil consumption data were not available. To determine oil consumption in these cases, statistics from the US Department of Energy “International Energy Annual: 2000″ were used. This source provided the total energy consumed through petroleum consumption as measured in British Thermal Units (BTUs). The amount in BTUs was converted into oil barrel equivalents on the basis of 5.8 million BTUs per barrel of standard crude oil.

The cartogram depicts the net consumption of crude oil for a particular country. For example, if a country produces more oil than it consumes domestically, it then appears in dark brown by an amount equal to the excess of its production over consumption (for example, Saudi Arabia). If, however, a country consumes more than it produces, the map shows the country in red by an amount equal to the net of its consumption less its production (like the United States).

In the year 2002, the data indicated that the amount of world oil consumption was slightly greater than world production–probably reflecting a temporary decrease in worldwide inventories. For the purposes of drawing the cartogram, the production for each net oil producer was increased by the percentage amount of this difference to depict what should be the approximate, near-term equilibrium among countries.