9.3 Flashcards
What is the global distribution of oil like?
Middle East holds the most (804bn barrels)
US, Saudi and Russia are the largest oil producers
Why are emerging countries consuming more oil?
Economic development, sectoral shift, more GDP, less poor population
More disposable income to consume products which need more energy. Industrialisation
E.g. China has seen oil consumption treble since the 90s.
What caused oil prices to rise?
Increasing demand caused a slow rise of oil price up to the recession in 2008
What caused the demand for oil in China to increase?
Rapid industrialisation caused the demand to increase, but they couldn’t keep up with the demand so oil was imported.
What happened during the recession?
Economies slowed down, consumers bought less, so less demand for oil causing the price to fall
How can diplomatic relations and conflicts affect oil supply and prices?
Saudi drove the oil prices down as they failed to agree on a production target with Iran, so they produced lots of oil.
What do new energy source discoveries do to oil supply and prices?
Demand decreases, price decreases
What is China’s geopolitics over oil situation like?
They want to reduce their dependence on the Middle East as they are vulnerable to price increase and want to have greater energy security
They would like to exploit Russia’s energy, Russia sees China as a threat and Russia are famous for switching off energy supply if the relationship becomes bad (e.g. with Ukraine)
What is Japan’s geopolitics over oil situation like?
They too want to use Russia’s oil as they are the 3rd largest consumer yet don’t produce enough
They want access to the ESPO pipeline, they offered money to extend the line closer to Japan
Russia’s exports with Japan have now increased
