A look at rising need of crude in energy rich nations

WITH the crude demand-supply balance definitely tight, the growing consumption in the energy rich, oil-exporting countries is under hammer, adding to the existing confusion on the future prospects of the industry.

Fresh data from the US Department of Energy show the amount of petroleum products shipped by the world


Rising cash flow from high price crude have fuelled a boom in oil demand inside Saudi Arabia and across the oil rich Middle East, leaving less oil for export, some are now starting to emphasize. At the same time, aging fields and sluggish investments have caused exports to drop significantly in some of the exporting countries such as Mexico, Norway and, most recently, Russia.

Although rising consumption in the emerging economies of Asia, especially China, is often cited as the major factor behind the current tightness of the market, the surging energy demand in the Middle East is also now starting to pose a major challenge. Demand in the Middle East appears a major factor right now. The boom in oil demand across the oil rich Middle East is leaving less oil for export, arguments are continuing to rise. Adam Robinson, an oil analyst at Lehman Brothers in New York, now predicts the region will constitute more than 40 percent of increased demand next year. The OPEC domestic demand has already increased in 2007 by 318,000 barrels per day, the US Energy Information Administration recently reported. Shortage of gas is also causing the pressure on crude in the region. Nations in the oil rich Middle East are using their gas in the chemical, fertilizer and liquefied-natural-gas industries. Saudi Arabia is currently in the middle of a major campaign to boost production of petrochemicals, aluminum and fertilizers, aiming to emerge as a world player in these sectors.

Arab News