At the present, crude oil is perhaps the most researched industry of primary products. Political determinants and unpredictable price fluctuations both contribute to the volatile nature of this industry. However, The international trade patterns of the petroleum market are more stable than the price patterns and have stayed relatively constant for the past decade.
Oil production is a pretty straight forward industry, meaning countries either have it or they do not. Middle Eastern countries and some located in northern Asia experience a natural wealth of oil that allows them to maintain a very profitable industry. Despite these countries’ exceptional oil wealth, most countries have at least a moderate amount of oil within their borders. This causes the oil exporting industry to be spread out with no single country capturing 15% of the total market annually.
Oil importation is a similar picture with a great number of countries contributing a small percentage of the total amount bought. However, industrialized nations such as the United States and Japan do import noticeably higher amounts than other countries. The industry will continue to receive a great amount of attention and perhaps see more changes because of political actions and alternative energy sources.
Exporting oil is a very profitable market for those selected countries that have the natural resources. Current data fluctuates, but UN Comtrade estimates the oil industry was worth over 3 trillion dollars in 2006. The market in generally spread out with the top ten exporting nations averaging 4-7% of the total market share or 13.5 billion dollars a year. Relevant data was collected from World Trade Analyzer, UN Comtrade, and CIA World Factbook. The data sources produce oil statistics in a variety of ways: total US dollars, percentage, barrels, and price per barrel. It is also important to notice that this data did not always match.
||Total Value of Oil Exports to the World in millions and as a percentage
Saudi Arabia is typically the top exporter followed by Russia, Norway, Iran, and the UAE, which all compete for the next top spots. The majority of the top ten exporting countries are members of the Organization of Petroleum Exporting Countries. These countries have bonded together to collectively regulate oil distribution among themselves. Most are located in the Middle East but not all of them.
It is interesting to note as well that the United States is a leader in oil producing nations but is not a leader in oil exportation. This is caused by the US’s incredible oil use, which causes a staggering deficit for the oil trade annually.
Importing oil is a necessary trade for most every industrialized nation, except for the petroleum rich nations. Highly industrialized countries make up the majority of the list with the United States leading the pack. Over the last 5 years, the United States has been followed by Japan, China, Germany, France, India, the Netherlands, and the United Kingdom in differing order. However, the United States imports more oil than the next three highest countries combined. This incredible amount is also on top of the nearly 9 million barrels per day that the United States produces for itself.
Despite the United State’s large importation of oil, 20-30% of the market in still made up of countries contributing less than 2% to the overall import share. There is also a tendency to form trade relations with other countries winthin the oil industry. The nature of the relationship is usually determined by regional ties and political connections. The United States, for an example, gets a lot of its oil from Mexico and Canada because they are not only close but also have the North Atlantic Free Trade Agreement to facilitate the exchange.
However, the United States clearly buys its oil from a large variety of places to create a competitiveness for the lowest price and also to ensure that there is always someone willing to sell. If the United States solely bought from one region, then some political factor or natural disaster could completely cut off the country's gas supply. Nevertheless, oil prices remain such an important topic in the news, and the price of a barrel is always changing.
International Trade has remained relatively consistent over the past decade. Even recently, there are only slight movements in the amount that countries are exporting and importing. Slight increases in importation are apparent in China and Taiwan but not dramatic enough to cause a global shift.
Oil and gasoline have been consistently important to industrialized nations for the past decade, but the future might hold more interesting trade patterns. Known reserves total in over 3 trillion more barrels of oil, but the world’s total consumption would absorb that sum in just over 50 years. The rise of alternative energy sources and alleviation of environmentally harming products could cause a sudden decline in the world’s demand. This would have an incredible effect on the countries that solely depend on oil as revenue. The future trade patterns of oil seem to be a good deal more unstable than in the past decade.