Lopatina Daria Mikhailovna

5th year student, School of Economics and Management, Far Eastern Federal University, Vladivostok

Popova Tatyana Nikolaevna

scientific supervisor, Ph.D. econ. Sciences, Associate Professor, Department of World Economy, ShEM FEFU, Vladivostok

Oil is a unique natural resource that, one way or another, is used by all countries. Being the most important source energy, oil has become the most traded commodity in the world. The global oil market is very developed and diverse. The balance of power there is determined by the geography of oil reserves, production and consumption.

At the end of 2012, proven world oil reserves amounted to 1668.9 billion barrels. Over the past 20 years, this figure has grown rapidly, increasing by approximately 600 billion barrels.

As of January 1, 2013, just under 80% of proven oil reserves are located in eight countries. Of these, six countries are members of OPEC and only two (Canada and Russia) are not members of OPEC. The 12 OPEC member states account for 72.6% of all proven oil reserves. The absolute leader in proven oil reserves is the Middle East - it accounts for about 48.4% of the total. For more than half a century, the world map of oil has been concentrated around this region. At the same time, about 15.9% of world reserves are in Saudi Arabia. However, the world leader in proven oil reserves at the end of 2012 was Venezuela with a share of 17.8%. Russia accounts for 5.2% of all reserves. World oil reserves by country are shown in Table 1.

Table 1.

World oil reserves by country as of 01/01/2013

Source:

It is worth noting that the level of proven reserves has doubled over the past 30 years. At the same time, the main increase falls on the share of the above countries. So, in the mid-1980s. Saudi Arabia's oil reserves increased by one and a half times, and in the late 2000s. Venezuela has discovered a number of large deposits in the Orinoco River basin, which allowed it to take first place.

The trend in recent years has been a decrease in reserves of easily accessible oil and a reduction in the number of discovered fields with easily produced oil, especially large ones. Today, about 80% of oil produced comes from fields discovered before 1973.

The geography of oil production in the world is determined by its actual presence in the country, the quality and level of oil reserves, as well as the technical capabilities of regions with oil reserves to produce and transport oil. In addition, the level influences economic development country and the degree of diversification of its industries.

Oil production is concentrated in countries with significant reserves of this resource. However, the level of available oil reserves does not always reflect the volume and rate of its production. Thus, the main oil-producing country is Saudi Arabia - 13.3% of world production, while in terms of reserves it is in second place - 15.9% of world reserves. At the same time, Venezuela, which has the largest oil reserves (17.8%), is only in eighth place in terms of its production volume - 3.4%. In second and third place in terms of oil production are Russia (12.8%) and the United States (9.6%), having only 5.2% and 1.9% of world oil reserves, respectively. Below is a table of the main oil-producing countries.

Table 2.

Oil production by the largest oil-producing countries in million tons

Source: BP Statistical Review of World Energy June 2013

Among the countries leading in oil production in lately are Saudi Arabia, which accounts for about 13% of production, and Russia, whose share of global production is more than 12% per year. The two largest oil producers - Russia and Saudi Arabia - account for a quarter of the total volume of oil produced. In 2009-2010, Russia was ahead of Saudi Arabia in terms of oil production, but since 2011 it has again lost the lead.

However, today we are witnessing a radical change in the situation: the center of oil production is shifting to the Western Hemisphere. The new energy axis runs from the Canadian province of Alberta, through the US states of North Dakota and South Texas, and to the huge oil deposits discovered off the coast of Brazil. Almost simultaneously, active development of oil sands began in Canada, development of pre-salt deposits in Brazil and oil in tight layers in the USA.

Over the past decade, Canada's oil sands have become one of the major sources of oil production not only for itself, but also for the United States. Canada's production now stands at 3.7 million barrels per day - more than oil exports from Libya before civil war. Last year, it managed to take fifth place in the world in oil production after Saudi Arabia, Russia, the United States and China, ahead of Iran.

At the same time, breakthroughs in the development of new exploration and production technologies have made it possible to discover significant oil reserves in the Santos and Campos basins along the southern coast of Brazil, previously inaccessible due to the fact that they are located at great depths and under almost two kilometers of salt. And a few years ago, a giant offshore Libra field was discovered in the Santos Basin, which could contain up to 15 billion barrels of oil, making it the largest discovery in the Western Hemisphere in 34 years. If current plans are implemented, oil production in Brazil will reach 5 million barrels per day by 2020, which is slightly more than 50% of current production in Saudi Arabia.

Third new source oil was developed in the United States itself: the introduction horizontal drilling and hydraulic fracturing technology has made it profitable to extract oil from tight layers. Oil production in this way has generated a lot of talk around the shale revolution in the United States. Many countries have expressed their concerns about the emergence of a strong competitor in the oil market, and this has its own objective reasons. Just 9 years ago, in the oil-bearing region of Bakken (North Dakota), experimental oil production from shale began at a depth of several kilometers. Today its volume has reached almost half a million barrels per day. As a result, the state became fourth in oil production in the country and first in unemployment reduction.

Oil production from shale in the United States is developing rapidly: in 2000, only 200,000 barrels per day were produced, and in 2020 it is planned to produce about 3 million barrels per day, or 30% of all production in the country. Active shale oil production allowed the United States to produce 9.9 million barrels of oil per day in the first half of 2013, which almost reached Russian level at 10.8 million barrels per day. However, despite the impressive production rates demonstrated by the United States, many scientists talk about the low profitability of shale oil production due to too high cost her prey. Only high prices for hydrocarbons on world markets make it feasible to extract oil from shale; their sharp decline will be a decisive factor for shale drilling. In addition, American companies invest in production, accumulating debt.

At the same time, the United States remains the main consumer of oil in the world. On the one hand, this indicates the development of US industry, on the other hand, its “oil dependence.” Despite the shale revolution, the United States produces only about 9% of global oil production per year, while consuming about 20%.

China is in second place in oil consumption (9%), Japan is in third (6%). Russia shares fourth place with Germany and India (more than 3%). Table 3 shows the ten largest oil consuming countries.

Table 3.

Largest oil consuming countries in million tons

Source: BP Statistical Review of World Energy June 2013

Industrialized countries remain the main consumers of oil. However, in recent years, consumption by developing countries has been rapidly increasing and, in percentage terms, their level of consumption has already almost approached the level developed countries. Thus, in OECD countries in 2012, oil consumption amounted to 50.2% of the world volume, in other countries - 49.8%. Consumption levels have increased in the Asia-Pacific region over the past two decades. Hydrocarbon consumption is rapidly and steadily increasing in rapidly developing China, which ranks second in the world in terms of oil consumption. Thus, in 2012, the growth rate of oil consumption was 5% compared to the previous year.

Thus, the main oil reserves are concentrated in the Middle East. However, recently new ones have been discovered large deposits in Brazil and Canada, the shale revolution was carried out in the USA. All this is shifting the center of production to the Western Hemisphere. The United States continues to remain the absolute leader in oil consumption, however, the main growth in demand is coming from developing countries, especially China.

References:

1. Russia in the global oil market // Journal “Russian Economy: XXI Century”. - No. 12. - 2011.

2. The USA has overtaken Russia in oil and gas production // Daily business newspaper “RBC daily”. [Electronic resource] - Access mode. - URL: http://www.rbcdaily.ru/world/562949989122544 (access date: 10/04/13).

3.BP Statistical Review of World Energy June 2013.

Europe remains the main market for Russian oil. Currently, 93% of all oil exports from Russia are sent to Europe. This assessment includes both the markets of the North- Western Europe, Mediterranean Sea, and the CIS countries. Oil supplies to the Asia-Pacific market are gradually growing. This market is dominated by oil supplies to China, also known as

provide the main increase. On the American market, the main consumer of Russian oil is the United States, but these supplies do not play a significant role.

Russia and Ukraine have agreed on the terms of a contract on the transit of Russian oil through the territory of Ukraine to the European Union. In the future, Europe will remain the main oil market for Russia. Russia will provide required growth oil supplies to Europe, but at the same time, due to a fairly intensive increase in oil production, it is planned to strengthen Russia’s position in the Asia-Pacific and US markets.

Of the 300 million tons of oil produced annually, about 100-110 in crude form is exported. Taking into account exported petroleum products, the total volume of exported Russian oil exceeds half of its production. For a non-renewable natural resource, the reserves of which are very limited in Russia, this is very high rate. The main consumer is the countries of the European Community. Pumped from Western Siberia Through the pipeline system to the European part of Russia, oil then travels in several directions. Part of it goes through the Druzhba oil pipeline to the west, to the former fraternal socialist countries. Two other streams flow, one towards the Baltic Sea, the other towards the Black Sea. On the Baltic Sea, the main point for transshipment of Russian oil onto tankers is the Latvian port of Ventspils. On the Black Sea, this happens in Russian Novorossiysk and Ukrainian Odessa.

Main pipelines, through which Russian oil is pumped, are tightly controlled by the state monopoly Transneft. Attempts by fairly powerful Russian oil companies to build something of their own are harshly suppressed. Moreover, they have to implement additional payments, through which the implementation of new Transneft projects is carried out. Supplies by rail are much less strictly tied to ports and pipelines, but they are more expensive and have volume limitations.

Oil exporters

World reserves of black gold amount to just under 1.5 billion barrels. In the context of growing demand for oil on the world market, the geography of its production in the world is primarily determined by the actual availability, scale and quality oil fields in these regions, as well as existing production capacities and the corresponding infrastructure for oil transportation.

Saudi Arabia occupies the first place in the world in oil production, and it should be noted that the volume of production in this country from year to year

fluctuates significantly, which is associated with the country’s action as a “clincher” in OPEC regulation of oil prices by limiting the volume of oil production in the country.

The 18 largest oil companies (not counting Russia) account for about 60% of world oil production, which indicates an extremely high degree of monopolization of the world oil market. In addition, it should be noted here that there is a large share of state-owned companies (of the listed companies, only 5 are private), which in recent years accounted for about 40% of the world's oil produced.

In Western European countries, oil consumption did not change significantly in some years, but overall increased by about 6%. In countries Eastern Europe There has been a long-term decline in consumption, which in recent years has been slowed down and even stopped, but has not yet been overcome.

Against the backdrop of numerous favorable forecasts for the growth of global oil consumption, Brent oil prices are now more stable than at any time in the last five years: they have never fallen below $61 per barrel since the beginning of November 2017, and in January for the first time since 2014 year exceeded 65 dollars and even - at the moment - exceeded 70.

Average daily volatility of 1.2-1.3% for the oil market is quite normal phenomenon and investors are not afraid, which is reflected in the growth of stock prices energy companies. For example, with the closure of the European pipeline for repairs and the corresponding increase in Brent prices by 3.3%, the shares of all the largest commodity companies in the world, already growing, showed almost a record increase for 2017 (BP + 2.2% , Total +1.4%, Royal Dutch Sell +1.7%). An additional impetus to the rise in oil prices was given by the news that OPEC countries agreed to extend oil supply restrictions until the end of 2018. In other words, oil is subject to two key conditions at once: the promised growth in consumption in the future and the absence of a current oversupply of oil on the market in the present. However, is everything so good and is it worth talking now about the return of a pronounced speculative component in oil pricing?

Let's remember: the triumphant ascent of oil began with OPEC's forecasts of an increase in global oil consumption in 2018 (360 thousand barrels per day more than now). At the same time, the “sand” initiative of American shale oil producers performed well (it consisted of extracting oil directly in the desert and transporting already prepared raw materials to oil refineries), who stated that in the near future they could produce about 11.8 million barrels per day. For comparison: Russia produces a little more than 10 million barrels.

A real breakthrough was the comments of major oil companies on OPEC’s long-term forecasts for the growth of oil consumption in 2040: the cartel believes that daily consumption could reach 107 million barrels per day, while this forecast is considered conservative by cartel analysts. At the same time, in mid-November, the International Energy Agency (IEA) published a report in which it increased its forecast for oil consumption in 2040 to 104.9 million barrels per day, which is 1.4 million more than the previous forecast. Currently, the weighted average consumption of oil in the world is approximately 96 million barrels per day.

At the same time, the forecasts of representatives began to come true oil business, who unanimously noted back in the summer that the development of electric cars is not a hindrance to oil prices. Indeed, in November, Tesla Motors reported record losses, explaining them by too large investments in the development of its own processor for artificial intelligence. In fact, the growth in sales of Tesla cars, predicted for the fall-winter, did not happen, and 1,000 orders for the first electric truck, which became the company’s main pride in December, financial condition won't help. Data for the full year is not yet available, but investors are already preparing for the worst.

Investments in renewable energy sources for last year increased by almost 30%, however, such projects (primarily solar power plants and wind generators) are mainly implemented in developing countries. Leader in production alternative energy Today, Chile produces perhaps the cheapest solar energy in the world. However, this has almost no effect on oil consumption in South America - the main consumer of oil on the continent is Brazil, which consumes more oil than all other countries Latin America, taken together. What can we say about limiting the consumption of petroleum products in the world against the backdrop of developing “green energy” projects?

Over the past ten years, oil consumption has increased on virtually all continents except Europe (say South America, according to BP, over the past ten years, oil consumption has increased by 75 million tons, and China - by almost 100 million). Production is growing, and so is the consumption of petroleum products, although virtually all authors of long-term forecasts indicate that oil consumption lags significantly behind expectations, just as global economic growth lags behind expectations.

However, each oil producer sees the peak of consumption differently. OPEC believes that consumption will peak in 2040, after which it will begin to decline. Royal Dutch Shell PLC and Norway's Statoil SA predict that peak consumption will occur in 2025 and 2030, respectively. Exxon Mobil Corp. and Chevron Corp. even believe that peak oil consumption will occur no earlier than in 100 years.

All these forecasts have an equal right to exist. Back in 2011, Vagit Alekperov said that oil, in principle, could not cost less than 100 dollars, but soon it dropped to 30. Until recently, analysts around the world said that the limit on oil prices was 50 dollars per barrel, but today oil prices are stable more than 60 dollars.

The fact remains: the oil market is the largest sector of the real economy in terms of the volume of funds involved in it. More recently, on December 6, 2017, oil prices fell by 2.5% thanks to a large number long positions on the market and the general tendency to close them, although other factors (decrease in crude oil reserves in US oil storage facilities, negotiations to extend the restriction of oil supplies, etc.) should have contributed to their growth. By and large, there is nothing extraordinary in this, if not for one nuance: the tendency to take profits on long positions in the market significantly affected the quotes of oil contracts for the first time since 2012. Most likely, this phenomenon will be repeated.

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The main consumers of petroleum products are concentrated in large industrial centers.  

The main consumers of petroleum products are industry, agriculture and transport, with the share of the latter in use liquid fuel is systematically increasing, which is associated with an increase in the number of ship engines running on diesel fuel and the rapid growth of automobile and air transport. The main consumers of gas and fuel oil as boiler fuel are power plants and combined heat and power plants.  

Agriculture as the main consumer of petroleum products is characterized by high level residues of petroleum products, mainly from the consumer.  

Transport is one of the main consumers of petroleum products and largely sets the direction for the development of global oil refining. Yes, annual world consumption various types transport fuel reached 1750 million tons, which is 50 1% of processed oil. According to forecasts, this share of transport fuel is expected to increase in the near future, mainly due to developing countries in the Asia-Pacific region. The development of transport and consumption of motor fuel in Ukraine, in general, corresponds to trends characteristic of Western countries, but also has its own national characteristics.  

As you know, one of the main consumers of petroleum products is agriculture with its powerful fleet of tractors, cars, combines and other equipment.  

Road transport is also one of the main consumers of petroleum products. Petroleum products, various acids and alkalis used in the operation and repair of motor vehicles end up in waste water and poison freshwater bodies and the world's oceans. Contaminated water not only becomes unsuitable for use, but also sometimes causes irreparable damage to the entire natural environment, with which it comes into contact.  

Road transport is also one of the main consumers of petroleum products.  

The territorial management dispatcher specifically indicates the directions of shipment and the main consumers of petroleum products. If the shipment is not carried out, the reasons are determined and measures are taken to eliminate them.  

The Republic of Bashkortostan, which occupies a key position between the oil and gas provinces of Western Siberia and the main consumers of petroleum products in the European part of Russia, which also has the most powerful complex of oil refining plants in Russia and the production of a wide range of petroleum products, has an extensive pipeline system providing transport system republics 64% of cargo transportation. The world's largest oil and gas pipelines have been laid on the territory of the republic; pipeline transport connects all exploited oil regions and oil refineries of Bashkortostan. The total length of the Ural-Siberian main oil pipelines, laid across the territory of the republic, is 3,750 km.  

The attitude of oil workers, researchers and production workers working in the field of oil refining to the problem of the chemistry of organic sulfur compounds of petroleum origin was and is determined by the demands of the main consumers of petroleum products or, in other words, by the standards for the sulfur content in petroleum products. It would be appropriate to remember here that the establishment of standards for sulfur is associated with the specific properties of sulfur and sulfur-organic compounds.  

Currently, about 100 million tons of motor fuels produced from oil are consumed annually in Russia. One of the main consumers of petroleum products is road transport. The situation will probably not change until 2040 - 2050. The inevitable depletion of oil fields, rising world oil prices, and the continuous tightening of requirements for the environmental performance of transport and stationary engines (in particular, diesel engines) are forcing us to look for a replacement for traditional petroleum motor fuels. The use of various alternative fuels in transport, including natural gas and the fuels obtained from it, coal, renewable energy sources, will provide a solution to the problem of replacing petroleum fuels, will significantly expand the raw material base for the production of motor fuels, and will facilitate the solution of fuel supply issues vehicles and stationary installations.  

Transportation of oil and petroleum products can be carried out by pipelines, by water (tankers, barges), by rail (tanks - bunkers) and by road (tankers, trucks) transport. As a rule, refineries are built near major cities- the main consumers of petroleum products, at the same time, the areas from which oil is supplied to most factories are located at a considerable distance, sometimes reaching several thousand kilometers. It is known that the most economical mode of transport of oil and petroleum products over long distances is pipeline, since the cost of pumping petroleum products through it is approximately three times lower than when transporting by railway, and two times lower than by water transport. In addition, the transportation of oil and petroleum products through pipelines allows it to be carried out continuously, with minimal losses while maintaining the quality of the product.  

At the same time, turnover accelerated working capital, which significantly slowed down the growth rate of petroleum product residues compared to the growth of general indicators. As can be seen from the above data, the level of petroleum product residues in transport in relation to the total volume of their consumption lags significantly behind the general economic level of this indicator, which is largely determined by the seasonality of agriculture - the main consumer of petroleum products in Ukraine.  

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The main countries and sectors of the economy are oil consumers

Oil produced in the Middle East is mainly exported to the United States, Asia and Europe. The main importer (and at the same time consumer) of oil is the United States (see Diagram 5 and 6). They are followed by Asian countries - rapidly developing China and India, as well as the powerful economies of oil-poor Japan and South Korea. European countries are in the second half of the top ten largest importing countries. Thus, the above countries account for about 70% of global crude oil imports.

According to OPEC and BP forecasts, oil consumption in China may increase by 8-8.5 million barrels per day by 2030, and the country will overtake the United States, becoming the world's largest consumer of this raw material. The increase in demand will mainly come from transport and industry (mainly the petrochemical industry).

In general, in the global economy, the increase in oil consumption will not proceed at such a rapid pace as in China. In OECD (Organization for Economic Co-operation and Development) countries, the structure of energy demand will shift towards gas and renewable energy sources (including biofuels), and the share of oil will decline in all sectors of the economy.

Chart 5. Ten largest oil consuming countries (million barrels per day)

Diagram 6. Largest oil importing countries in 2010

Possibility of quickly replacing oil with alternatives in major consumer sectors

The replacement of hydrocarbons with alternative energy sources is a necessity due to the policy of reducing harmful emissions, exhaustibility natural resources and the issue of diversifying the energy base of states. The commitments of the governments of the world's leading countries, adopted at the UN Conference held in December 2009 in Copenhagen, and the G20 meeting in September 2009 in Pittsburgh, are aimed at reducing emissions by at least 50% by 2050, limiting the increase in global temperatures up to two degrees above pre-industrial levels (the so-called 450 Scenario) and the elimination of subsidies for the extraction and use of fossil energy sources. However, according to BP forecasts, OECD countries will be able to reduce their own carbon emissions by only 10% by 2030 compared to current levels. Despite all the measures taken by the governments of non-OECD countries, the strong growth in energy consumption (especially coal) by their economies will lead to an increase in emissions in these countries by one and a half times by 2030. In general, positive trends in limiting the influence of global energy complex on the global climate are present, but they are clearly insufficient for the implementation of Scenario 450.

Tightening policies aimed at reducing the carbon intensity of the economy is also associated with the need to diversify the fuel balance of countries. According to BP forecasts, the shares of the three main fossil energy sources (coal, oil and gas) will converge and by 2030 will amount to 26-27%, and non-fossil sources (nuclear power plants, hydroelectric power plants and renewables, including biofuels) will occupy about 7% each. Thus, gas and renewable energy resources will gradually displace oil (as well as coal) from the electricity industry, and biofuels, hydrogen and electricity will find their use as driving force for transport. However, oil will definitely not lose its relevance in such a sector of the economy as petrochemistry, being, in fact, the only source of raw materials for it.

Do not forget the fact that sharp dramatic changes in the global fuel balance are hardly possible. And it’s not so much about the new environmental paradigm, the problems of non-renewability of fossil natural resources or the uniqueness of physical and chemical properties of one or another type of fuel, how much in the high capital intensity and considerable time costs of all investment projects related to the development of energy (including oil) industries. And here the assessment comes to the fore economic efficiency(payback) of projects, the cost of future production and, as a consequence, the issue of pricing as the cornerstone in relations between suppliers and consumers of energy resources. As we can see below, oil prices have long been no longer guided by classical market relations and move according to their own laws.