Countries With the Highest Demand for Oil

Nearly a third of the world’s total oil consumption comes from just 10 countries out of nearly 200. The United States is the world’s biggest oil consumer, followed by Asian countries China, Japan, and India. These are among the most industrialized or the most rapidly industrializing economies in the world, and host high populations, which make them aggressive consumers of oil and its derivatives.

United States

For many decades, the United States has been the world’s biggest oil consuming country. In 2012, it accounted for nearly 20 percent of the world’s total oil consumption per day. In 2005, it recorded the highest level of oil consumption ever, at 20.8mbd (million barrels per day). The strong demand is understandable because the U.S. runs many of the world’s most important factories, the largest thermal power plants, and has the most number of cars on the road. In recent years, however, the demand for oil has been declining. This is attributed to increased use of more fuel-efficient vehicles and growing reliance on renewable sources.

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China

China, currently the largest economy in the world by purchasing power parity (PPP), posted the greatest growth in oil consumption over the last decade. China is currently the second biggest oil importing country in the world and its net oil imports have steadily climbed up from 3.43mbd in 2008 to 5.86mbd in 2012.

Japan

Formerly the second richest country in the world (by nominal GDP), Japan remains a heavy consumer of oil and oil products. It recorded its highest oil consumption in its history in 1996 at 5.7mbd. Apart from large-scale industrial activities and high volume of car ownership, the country’s lack of fuel resources also explains its position as the third biggest oil importing country in the world. 

India

Although still a developing state, India ranks fourth among the biggest oil consuming countries on the planet. Its oil consumption in 2012 stood at 3.6mbd, which accounted for about 4.2 percent of the world’s average oil consumption per day during the year. Rapid industrialization and a growing number of wealthy individuals drove the country’s oil consumption to three-fold in just under 20 years.

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Brian Alfaro is the founder and president of Primera Energy LLC, a San Antonio, Texas-based petrochemical leader. To know more about the company, visit this website.

Who Gains What Upon Iran's Re-Entry into The International Oil Market

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Although the lifting of sanctions on the Islamic Republic of Iran has yet to become fully manifest until later in the year, the country’s thawing relations with the U.S. are expected to have a profound impact on the petroleum industry as Iranian crude makes its way to the world's market. While the obvious projections have been put forward, the oil industry is rarely simple enough to be summed up in a global manner.

There are specific instances where the arrival of Iranian crude to the market is welcome. Likewise, the expected negative setbacks may hit some states more heavily than others.

On one hand, Russia can stand to lose considerably in this scenario. The arrival of Iranian crude to the European Union, expected to be 25-35 billion cubic meters, could jeopardize Russia's exports to Europe. The implications are also staggering, as the Russian oil industry is based particularly on high cost exploration in the Arctic Ocean.

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Growing economies like South Africa, on the other hand, are one of the clearest winners in the lifting of sanctions. As the second-largest economy in the continent, South Africa has a growing demand for energy. Moreover, South Africa's refineries specialize in processing much of the crude produced by Iran's oil fields, making the country a prime customer for Iranian oil. Other nations in the region, including Angola, are also expecting to benefit from the lifted restrictions.

Brian Alfaro heads Primera Energy, LLC, which has invested in several oil shale exploration ventures in Texas using state-of-the-art technology. Visit this website for more on the company and its projects.

Economic Impact of Fracking in the Texas Region

Shale gas was first extracted in U.S. in 1821 from shallow fractures. Today, shale gas extracted with modern hydraulic fracturing techniques is the fastest growing contributor to the country's total primary energy deposits.

According to the Energy Information Administration, the state of Texas is the largest producer of shale gas in the country, with the majority produced coming from the Eagle Ford, Barnett, and Haynesville formations.

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During the height of the shale gas boom in 2002 to 2012, Texas gained over 64,000 jobs. In 2014, indirect economic gains from the Texas oil and natural gas industry resulted in nearly 2 million jobs in related sectors, and the three major Texas shale formations have contributed to more than $300 billion in the state's economic activity.

In addition, a study by the University of Texas at San Antonio Institute for Economic Development projects that a 20 county region in Central and South Texas will support 127,000 direct jobs by 2022.

Most of the country’s skilled drilling workers, as well as executives, researchers, and experts at shale gas extraction reside in Texas. In 2014, the state's oil and natural gas industry paid more than $15 billion in royalties and state and local taxes, providing Texas with the means to fund infrastructure, education, economic development initiatives, children's health insurance, and other projects and public services that contribute to the stability of the state.

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Current low energy prices are also giving an economic boost, contrary to naysayers. Many international industrial companies, such as Taiwan's Formosa Plastics and Austria's Voestalpine, have set up or are planning to move some of their facilities to Texas. Cheap shale gas prices help narrow the production gap between North America and heavily industrialized countries like China, and government incentives and grants attract investors.

Primera Energy LLC, founded by Brian Alfaro, engages in oil exploration and production in the Barnett and Eagle Ford shale formations. For more discussions on the economic effects of the shale industry, like this Facebook page.

How Will the U.S.–Iran Nuclear Agreement Affect World Oil Markets?

Not too long ago, analysts had to allay fears that the tense relations between Iran and the United States would cause a sudden spike in the price of petroleum. Now, the U.S. and world oil markets are faced with an unusual reversal of the scenario.

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The continued growth of supply, which has produced a glut in world petroleum markets, drags into more uncertain future with the landmark agreement between the United States and Iran regarding the latter's nuclear policy. With the loosening of international restrictions surrounding Iran's oil exports to the United States and the European Union, the oil industry faces a new challenge that could have several repercussions on the oversupplied petroleum market.

It will be a matter of months before Iranian oil fully penetrates the world market as it did before, the effects of which would largely be dependent on how long the supply glut continues until then, and whether Iran's production would increase not long after.

On the other hand, there remain a few who are convinced that the arrival of oil from Iran would not significantly affect the price of oil. Iran's present production would not have a sustained impact on benchmark crude oil price as it represents only a third of the world's daily consumption. Likewise, an increase in production from the country could trigger a chain reaction that could cause prices to drop significantly.

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Long-term investors, on the other hand, could see no cause for worry about the prices. Although the expected increase in demand in the season is not considered spectacular, there remains hope, based on previous trends, that gasoline prices (and, by extension, petroleum) would eventually stabilize as demand increases.

Brian Alfaro is the founder and president of Primera Energy LLC, a company based in San Antonio that runs operations in the Eagle Ford Shale and Barnett Shale. Visit this website for more on his company and its guiding principles.

Well of fortune: New hydrocarbon hotspots could drive another oil boom

Despite fluctuating oil prices (which are inevitable), the U.S. is still believed to be playing well in the petrochemical industry. Indeed, local crude oil reserves have been nearly depleted, but the discoveries of new shale deposits in key fields are securing the country impressive standing in the energy Olympics.

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An oil shale is an unconventional source of organic fuel but has the quality to rival the finest hydrocarbon products. The U.S. has a huge advantage in this area as it possesses the world’s largest deposits of these sedimentary rocks. While hydrocarbon export remains moderately possible, the domestic demand for fossil fuel can now be easily satisfied at a much lower cost, at least.

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The oil shale revolution is a game changer. It could transform the global energy outlook, and with more than 4,000 shale wells currently in place, there is little hint that the industry will decline as fast as it boomed. The substantial resource size combined with the ability of the industry to harness its maximum economic potential through steady improvements in technology could dwarf earlier pessimistic forecasts. The status quo leaves enough room for the United States to become the largest global oil producer in just a few years.  

Texas-based Primera Energy LLC, an oil company founded by Brian Alfaro, aims to make the U.S. self-sufficient in energy supply by employing the most advanced and most effective methods of extracting high-quality hydrocarbons from the Texan oil shale. To know more about the company’s success story, click here

US oil production at its finest since 1972

In 2008, the United States was producing an estimated four million barrels of crude oil per day and importing more than twice that amount from other countries. This oil was then refined into useful substances such as gasoline, kerosene, heating oil and other products. But, even though the country produces a lot, it is not enough. To keep up, oil companies keep looking for new sources of petroleum, and improving ways of extracting oil from these.

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Since 2008, US crude oil production has been seeing a steady rise, 80 percent to be exact, and it is forecast to reach its highest level, since 1972, in the coming year, according to U.S. Energy Information Administration gave the forecast.

The United States has already overtaken Saudi Arabia and Russia in crude oil production this year, when the country has already reached 11 million barrels of oil produced daily, just in the first quarter.

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The reason behind this surge can be found in Texas and North Dakota where shale formations provide the best locations for oil extraction. Oil companies split rocks using high-pressure liquid. This process is known as hydraulic fracturing, or fracking. Texas and North Dakota are now responsible for almost half of the total US oil production.

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With the conflicts in Iraq continuing to affect oil production and oil supply rising locally, it is expected that the U.S. will loosen its dependence on oil exports from this country in the coming years. Although there has not been a significant change in oil prices in the global market, changes will soon come in the following years.

Headed by Brian Alfaro, Primera Energy, LLC operates its oil business in Southern Texas. Learn more about the company here.

Looking beyond the horizons: Growth opportunities for oil exports

As domestic prices for petroleum continue to go down, experts throughout the U.S. petroleum industry are suggesting lifting the restrictions surrounding oil exports that continue to be in place despite the huge supply. The disparity of prices between markets, as well as the growing supply of stored, unrefined crude with no place to go, only adds to the pressure of changing the petroleum export policies of the United States.

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Without it, industry leaders say, the expansion of domestic oil production—particularly the nascent shale oil industry that had hitherto driven the boom in supply—will come to a standstill or even be reversed. Such a situation could lead to future supply problems as domestic production would fail yet again to meet domestic demand and make the nation heavily dependent on imported oil.

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There are segments of the industry, however, such as the American Fuel and Petrochemical Manufacturers, who argue against lifting the trade restrictions on petroleum exports as a stopgap measure for a temporary hiccup in oil's market cycle. Those against the ban point out that its supporters are mainly refineries, which benefit from low prices and profit from the still-high prices of petroleum products like gasoline.

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Lifting the restrictions on petroleum exports will allow oil industry players to tap into the growing international petroleum markets, which currently have better overall prices in spite of the drop in the price of the commodity in the global markets. This will not only increase the domestic price of oil, relieving the petroleum industry somewhat, but also reduce the price of gasoline worldwide, something that has profound and widespread economic benefits in the country and across the globe.  

Headed by Brian Alfaro, Primera Energy, LLC operates on the Eagle Ford Shale in Southern Texas. Visit this website for more on the company and its operations.