The increase in demand and use for medium and heavy duty vehicles is paving way for growth in the crude oil market. And, while use of crude oil is problematic in these vehicles, till other fuels as effective as crude oil energy, it will remain the main source of energy for the transportation industry. Other areas where crude oil is used includes detergents, plastics, synthetic fibers and synthetic rubbers.
This wide usage will lead to global crude oil market charting a steady growth curve over the period of 2016 to 2024. And, the decent CAGR (Compound Annual Growth Rate) will lead to a good number of growth opportunities, adding to the market worth.
Some of the most significant factors that should be noted in the analysis of global crude oil market are outlined below:
- World will see an increase in population by 2 billion – a rise to 9.7 billion from 7.7 billion – by 2050. This means not only will these extra people need houses, but public and personal transportation, home care and personal grooming products such as detergents, plastics, and cosmetics. This will lead to an increase in demand for crude oil, helping the global crude oil market on a high growth trajectory.
- Mineral oil is a bio product of crude oil refining and is used massively in personal care products such as soaps, lotions, lip balms, and so on. As awareness regarding personal grooming grows, demand for mineral oil is expected to grow contributing positively to the growth of global crude oil market. It is important to note here that social media is playing a crucial role in developing this awareness towards better grooming. And, it is also setting a higher beauty standard, allowing for study growth in the cosmetics industry.
Global Crude Oil Market: Description
Crude oil is a naturally occurring hydrocarbon found in geological formations beneath the earth’s crust. Crude oil in both its unprocessed and refined states is broadly classified as petroleum. Petroleum satisfies a majority of the global energy demand. The demand for crude oil is directly proportional to the growth of global energy demand and a multitude of other macroeconomic factors ranging from disposable income to a rate of urbanization. Crude oil is further processed in refineries for making a large number of consumer products such as gasoline, kerosene, plastics and chemicals among others. The overall demand drivers for crude oil can be sub-divided into the individual demand growth of crude oil end use areas. One of the major uses of crude oil is for the manufacturing of gasoline. Countries such as the U.S. utilize nearly 45% of their entire oil requirement for making gasoline and fuelling their ever growing transportation sector. This trend is now being replicated most by the emerging economies of South America and Asia-Pacific.
Global Crude Oil Market: Drivers and Restraints
Growing disposable income and reducing costs of automobiles have increased gasoline demand manifold in these regions. The growing medium and heavy duty vehicle market are also increasing the consumption of diesel in the aforementioned countries. Until a cost effective transition to cleaner fuels is achieved, the global transportation sector will continue to increase the demand for crude oil. Other transportation sector applications involve its use as a bunker fuel for the marine transport sector and as jet fuel for the aviation sector. With increasing demand of petrochemical products, the growing demand for crude oil is inevitable. Detergents, plastics, synthetic rubber and synthetic fibers are some of the major end use segments of crude oil. Growing demand in the fertilizer and pesticide market is also stimulating the demand for crude oil to a large extent. Crude oil can be measured in terms of sulfur content as sweet and sour. Sweet crude has a lower sulfur content which progressively increases in sour crude. Crude oil can also be segmented on the basis of API gravity as light and heavy. Crude oils with higher API gravity are lighter and vice versa. The crude oil market can be segmented on the basis of type as Brent Blend, Russian Export Blend and West Texas Intermediate (WTI) among others. Brent Blend crude oil is used for pricing nearly 60% of the global crude oil traded. These segments are used for determining the price of crude being traded on a daily basis.
Global Crude Oil Market: Geographical Dynamics
In terms of crude oil production the Middle East is the market leader with Saudi Arabia producing the most crude. The Europe and Eurasian region closely follows with the Russian Federation as one of the major contributors. In terms of crude consumption the Asia-Pacific is leading with China at the forefront, accounting for nearly 12% of the global crude consumption in 2013. Other major consumers in Asia-Pacific include South Korea, Japan and India. The U.S is the largest consumer of crude oil as a single country, accounting for nearly 20% of the global crude consumption in 2013. The Asia-Pacific and South & Central American regions have shown the highest growth in crude consumption from 2008 in 2012. Moderate increase in consumption levels has been observed in the Middle East and African region while Europe has shown a decreasing consumption trend. North Americas demand for crude since 2008 has remained nearly constant.
Some of the major crude oil producers in the world include Saudi Aramco, Gazprom, Exxon Mobil, Rosneft, Royal Dutch Shell, Chevron and Total among others.
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