Oil is often called the lifeblood of industrialized nations. Once refined, oil can be turned into automobile gas, petroleum products, chemical products, and a number of other common items we use every day.
Its widespread use is just one reason why it has such a significant impact on our financial systems. The oil industry also employs hundreds of thousands of people around the world.
Below, we’ll explore several stats and stories that show the incredible impact oil has on the world, including what happens when the markets get disrupted.
1. The World’s First Oil Well Was Located Near Titusville, Pennsylvania
In 1856, Edward L Drake created the very first oil well. The now world-famous well produced between 20-40 barrels of oil per day, which soon filled all the whiskey barrels in the city. For the next 40 years, Western Pennsylvania produced nearly half of the world’s oil until the East Texas oil boom in 1901.
The state still produces oil to this day, though at a much lower rate than previous years.
2. Just 10 Countries Are Responsible for 70% of Oil Production Worldwide
Oil production is not limited to one or two main countries. But just 10 countries produce most of the world’s oil — and those ten countries might not be what you think! According to the US Energy Information Administration, the top 10 oil-producing countries in the world are:
- USA (19%)
- Saudia Arabia (12%)
- Russia (11%)
- Canada (5%)
- China (5%)
- Iraq (5%)
- UAE (4%)
- Brazil (4%)
- Iran (3%)
- Kuwait (3%)
In 2019, the top five oil-producing countries produced 53% of the world’s oil supply.
3. The Third-Largest Oil Reserves Are Located in Alberta, Canada
There are 165.4 million barrels of proven oil reserves in Alberta, making it the world’s third-largest oil reserves, after Venezuela and Saudi Arabia. One of the major industries for these Bitumen reserves is the automotive industry (it is often used to make asphalt). But Canada is also exploring non-combustion products that can be produced with the Bitumen.
4. The Largest Oil Refinery in the World Is in India
The Jamnagar refinery in India is the world’s largest refinery with a capacity of 1.24 million barrels of oil a day. The refinery is spread out over 7,500 acres and cost more than $6 billion to build. Despite their large refinery, India does not even make the top 10 list of oil-producing countries, which shows the reach of the oil industry.
5. Asia Consumption of Natural Gas and Petroleum Products Is Rising Faster Than the Supply Is Growing
This shift has the potential to impact trade patterns and infrastructure investments around the world. Asia’s demand for oil is expected to increase by 22% between 2018 and 2050. During the same time period, the supply of crude oil is projected to increase by just 21%, with Russia, the US, and OPEC countries remaining top producers. This could have implications for both the financial markets and alliances between countries.
6. The Second West-East Gas Pipeline Is 8,819 km Long and Can Deliver 30 Billion Cubic Meters Annually
The pipeline runs from Xinjiang to Shanghai and Hong Kong and consists of one trunk and eight branches. The pipeline mostly supplies gas from Central Asia and passes through 14 different provinces. Construction on the pipeline began in February of 2008.
7. The Price of Oil Has Only Gone Negative Once in History
The price of oil influences many other economic factors, including the cost to manufacture many goods, revenue for a range of companies, and the cost of goods and services like airline tickets.
This means that when the cost of oil drops, it can have a strong impact on the world economy. Usually, oil hovers between $50 and $100 per barrel. However, after the COVID-19 pandemic hit, oil prices actually went negative.
This means that oil producers actually had to spend money to get rid of their oil (or pay to store it). This was the first time in history that oil prices went into the negative. The shift may have been due in part to a reduction in travel and driving.
8. Oil Exports From the US Have Doubled Since 2014
According to Stastista, the US exported just over 4 million barrels of oils per day in 2014. By 2019, that rate grew to more than 8 million gallons of oil per day. Most US oil goes to Canada, Mexico, and Saudi Arabia.
9. Studies Show That Oil Prices May Impact the Stock Market Less Than Previously Thought
There is no doubt that oil prices impact the US and world economy. However, a recent report found the price of oil is less likely to impact the stock market than previously thought. Researchers did find that the value of the dollar can have an impact on the price of oil.