Oil prices started to skyrocket when one quarter of global supplies went into irreversible decline
Oil prices started to skyrocket when one quarter of global supplies went into irreversible decline
There are many reasons why oil prices went up in the last 10 years but the loss of 6.7 mb/d of production from a group of around 20 countries is definitely one of the factors. This group had a 26% share of total production in 2004, declined by 3.6% pa since then and has now a share of only 16%. But it kept busy a much larger, still growing group of now 31% share to offset this decline. For 9 long years, 47 mb/d (54% share) of flat, declining and offsetting oil production has practically not changed. Growth above this level has only come from the 3 top producers: Russia (+1.5 mb/d), Saudi Arabia (1.1 mb/d) and the US (+2.8 mb/d). Global average, albeit uneven, growth over these 9 years was a very modest 0.8% pa, which is the root cause for the ever stuttering world economy. The 2.8 fold increase in oil prices since 2004 gives us an idea what will happen when a larger percentage of countries peaks and then declines, not to mention when the global peak is reached.
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