The impact of declining oil exports
Each year a dwindling global pool of exports has been generating ever greater competition among importing nations and has become a largely unheralded force behind record high oil prices, Cobb writes.
An employee of Indonesia's state-owned oil company Pertamina walks past oil drums at the company's main depot in north Jakarta in this December 2004 file photo. Global oil exports have declined since 2006, Cobb writes.
Dadang Tri/Reuters/File
It is with trepidation that independent petroleum geologist Jeffrey Brown has watched global oil exports decline since 2006. With all the controversy in the past several years over whether worldwide oil production can rise to quench the world's growing thirst for petroleum, almost no one thought to ask what was happening to the level of oil exports. And yet, each year a dwindling global pool of exports has been generating ever greater competition among importing nations and has become a largely unheralded force behind record high oil prices.
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Kurt Cobb is the author of the peak-oil-themed thriller, 'Prelude,' and a columnist for the Paris-based science news site Scitizen. He is a founding member of the Association for the Study of Peak Oil and Gas—USA, and he serves on the board of the Arthur Morgan Institute for Community Solutions. For more of his Resource Insights posts, click here.
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Even though the trend in oil exports has been evident in the data for some time, the analyst community was caught by surprise when a Citigroup report released earlier this month forecast an end to oil exports in 2030 from Saudi Arabia, currently the world's largest oil exporter.
Brown, as you might expect, wasn't surprised at all. His own forecasting model, which he calls the Export Land Model, has been predicting more or less the same thing for some time. He doesn't think the Saudis will actually let exports to go all the way to zero because they'll probably want at least some revenue from exports. But "one to two million barrels per day of exports [from Saudi Arabia] between 2030 and 2040 will not be a big deal in the world," said Brown, who runs a joint venture exploration program based in Ft. Worth.
Brown estimates that worldwide net exports of petroleum liquids--a number that includes both crude oil and refined products such as gasoline and diesel--declined from 45.6 million barrels per day (mbpd) in 2006 to 43.7 mbpd in 2011. He uses the net exports number because importers such as the United States export some of their imported crude back into world markets in the form of refined products such as gasoline and diesel. Even so, the United States remains the world's largest net importer of petroleum products.
The decline in global net exports may seem small for now. But it is persistent and comes in the face of growing demand among the rapidly expanding economies of Asia, particularly China and India. And the trendlines, if they were to continue, would mean that China and India alone would consume all the world's available petroleum exports by around 2030. Something's bound to give before then, but it's not clear exactly what.
Brown focuses on a key number which he calls cumulative net exports (CNE). It's the total expected volume of exports from oil-exporting countries over the entire period from now until global exports are presumed to drop to zero around 2060. It's based on the trajectory established in the data from 2005 through 2011. Though the timetable is likely to change, when he looks at CNE alongside the current rate of decline for exports, it's clear that the world's remaining exports are "front-loaded." The largest portion will be delivered in the years immediately following the export peak. It's why "we've experienced something close to business as usual" since the apparent export peak in 2006, he said.
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