The World Oil Balance has traditionally been a skewed one. While certain regions in the world have high supply of crude oil many other regions have very low or no reserves. The Middle-East has the bulk of the reserves and most countries in this region have surplus supply of crude oil. However there are many countries whose demands for oil are much higher than what they can internally supply and hence need to import oil from the oil exporting nations.
Recent studies have shown that it would be increasingly difficult to meet the growing demand for oil across the globe in coming years. As a result oil prices are expected to shoot up at exponential rates. According to a research conducted by the International Energy Agency (IEA), based at Paris, the global oil demand is expected to rise by 2.2% between 2007 and 2012.
Furthermore, the report by IEA states that the major increase in demand for oil would take place in the developing countries. The Asian countries – China and India would record the highest growth in demand for crude oil according to the IEA report. This has been attributed to the increase in industrialization and economic growth in these countries.
A significant part of regional imbalances between production and consumption of oil can even out if surpluses are transferred to regions with deficits.
In 2006, there was a negative oil balance of 11.1 million barrels per day in North America. Asia Pacific had the highest imbalance amounting to 16.6 million barrels per day while Europe had a deficit of 2.9 million barrels per day. The Middle East, on the other hand, had a surplus of 19.6 million barrels per day. Oil transportation has been identified as the only way to maintain world oil balance.
In the United States, the annual average supply of oil in 2007 was 8.48 million barrels per day, while the annual average demand was 20.7 million barrels per day. The global annual average supply of oil in 2007 was 84.60 million barrels per day while the annual average demand for the entire world in 2007 was 85.59 million barrels per day. This shows that there is only a marginal imbalance in the total global supply and demand for oil. Thus, oil transportation between proper points would go a long way to maintain the oil balance of the world.
In March 2008, the total supply of oil in the world declined to 87.3 mb/d (a decrease of 100 kb/d). This was due to decline in supply from OPEC (Organization of Petroleum Exporting Countries), non-OPEC Africa and the North Sea. On the other hand the global demand for oil products declined to 87.2 mb/d (a decrease of 310 kb/d).
The countries with major oil reserves are –
Saudi Arabia
Canada
Iraq
Iran
Kuwait
United Arab Emirates
Venezuela
Russia
Libya
Nigeria
United States
Mexico