Who benefits from the oil curse

Impressive rise in oil prices in the first quarter of 2011, causing many memories of similar price movements in 2007, 2008, but differences between the current situation of the event three years ago and substantial. Thus, according to Energy Information Administration (EIA), in three of the four largest economies in the world - U.S., EU and Japan - the demand for oil in recent years reduced. In 2010, when the global economy showed some signs of recovery after the crisis, consumption increased only in the U.S. (but remained below the level of 2007), while European and Japanese consumers reduced demand for oil. To pre-crisis rates of oil consumption developed world is still far away: European countries, the Organization for Economic Cooperation and Development (OECD) have reduced their consumption to 15.5 million barrels per day (mbd) to 14.4, Japan - 5 mbd to 4.4, the U.S. - from 20.6 to 19.1 mbd. However, the trend is to reduce consumption, "the West" is compensated by increased demand from developing countries. Thus, the consumption of oil by countries outside the OECD, has grown from 37 mbd in 2007 to 40.6 mbd in 2010. Leader in demand as easy to guess, was China - raw Gargantua shown in the crisis years fine appetite: intake increased over the 3 years more than 20% c 7,6 to 9.2 mbd. Slightly increased oil consumption and China's neighbors in BRIC - India, Brazil and Russia: the impact rapid post-crisis recovery. However, the strength of developing countries was enough to overcome the old pre-crisis peak of global oil consumption has been made just in 2007, while world consumption was 86.3 mbd in 2010 - already 86.7 mbd. However, if you subtract the abnormally high rates of growth in oil consumption in China (many commodity analysts believe that a solid percentage growth of Chinese imports are not for consumption, and settles in the strategic petroleum reserves), we get even a drop in demand. Oil - a delicate matter. The current surge in oil prices is not due to anemic growth in demand, and geopolitical and speculative factors. True, the events in Libya alone are not likely to have much impact on prices - this North African country ranks 12th among the largest oil exporters to the volume of exports 1.5 mbd, which is less than 2% of the daily global consumption. Although Libya and delivers high-quality oil, valued at imprisoned under it a refinery in Europe (especially Italy), the loss of such second-tier supplier is not crucial, especially considering that the OPEC countries for the crisis period has accumulated quite a large amount of free capacity. We can assume that the reason for the frisky prices linked to the situation in Saudi Arabia, which is the world's largest oil exporter - 7 mbd a day. Saudi Arabia - the Arab world, which shakes the fourth month. Events in Tunisia and Egypt quickly responded to the civil war in Libya, the unrest in Algeria, Yemen, Syria, Oman and Bahrain. The entire region has become highly unstable, and this factor makes the analysts to overestimate the risks of failure of supply from Saudi Arabia - but it would be a terrible dream for all the hydrocarbons market and world economy as a whole. Reset demand. In all the discussions about the price you should pay attention to both sides of the pricing - on both the supply and demand. With the latter, too, there is uncertainty. Rising oil prices for the economy is almost equivalent to an additional tax on consumption, undermines the purchasing power of the population, but also worsens the trade balance of countries - importers of hydrocarbons. In most developed countries, and occurs (with the exception of the few major oil exporters such as Canada and Norway). For many developing countries - importers of oil) is true to an even greater extent, as they spending households on food and energy make up a large share of total spending, compared with developed countries. In developed countries, vulnerability to high oil prices also vary. For example, in Europe the price of gasoline price of oil is half the average, the rest - taxes. In the U.S., taxes are only slightly more than 10%, and changes in oil prices immediately affect gas stations. But in the U.S., where the largest oil consumption per capita, a huge energy saving potential, far more than in Europe - there is much in this matter has already been done. First of all, given that more than half of world oil consumption goes to transportation needs, the U.S. can focus on its highly neenergoeffektivnom fleet. Although demand for oil and inelastic in the short term because of the lack of alternatives, which could be quickly switched, in the longer term, consumers are gradually changing their habits, trying to minimize their costs on expensive energy. The collapse of the market of large SUVs SUV in the U.S. in 2008 could serve as a good illustration of this process of adjustment to higher prices. Once in the U.S. in 2008, gasoline prices began to go off-scale for $ 4 per gallon (in Europe, prices on average 1.5-2 times higher), the sale of gluttonous SUV, also surnamed gas guzzlers - gas guzzlers, collapsed. Over the last year the market tanks on wheels almost come to life, very interesting to watch him now, a new period of rise in oil prices. Price of a gallon in some parts of the United States have already passed the mark of $ 4. In any case, auto sales statistics in the U.S. in recent months have shown increased interest cost to customers in hybrids. In many countries, governments try to protect the population from rising energy prices through subsidies. With state subsidies for gasoline demand of the population, in theory, should not suffer a reaction to the rise in world oil prices, but in the end price to pay state or private and public companies, which require gasoline to sell at artificially low prices. This inevitably worsens the trade balance and budget oil-importing countries. According to the International Energy Agency 2010 World Energy Outlook, global oil subsidies peaked at $ 280 billion in 2008 (grants to all types of fossil fuels reached as much as $ 558 billion), then that amount has slipped to $ 130 billion in 2009 (Minerals - $ 312 billion), when prices fell. In 2011 a new record is possible. Survive if it's already battered global financial crisis, the state budget? The black spot. All these effects of high oil prices are reflected on consumers and on budget, International Energy Agency (IEA) estimates as the "oil burden", which is calculated as the nominal cost of oil (demand multiplied by the world price) divided by nominal GDP . Argue that the growing burden of oil is at a certain point the global recession, it is impossible (although in the case of a sharp rise in oil prices in 1970 is exactly what it was), but that it exacerbates the impact of economic and financial shocks - no doubt. Thus, economic activity in OECD countries has stagnated even before oil made its impressive cast to $ 90 per barrel in late 2007 to $ 147 in June 2008. But although the "great recession" was due, above all, the events in financial markets, high oil prices could be "the last straw." At the moment, it is estimated IEA, the oil burden reached 5.4% of global GDP, more than in recessionary 2008, (5.1%), when it reached its second most important figure in the history (it was higher only in 1980 - at 8.0%. All of this is higher than the "tolerable" level to the global economy in 3.5-4% of GDP, implying quite comfortable for the producers price of $ 70-80 per barrel. All that we see now - very weak post-crisis recovery, super soft monetary policy and rising energy prices and food insecurity in the background on key energy market for the region - is extremely worrying signs for the future of the global economy. So the repetition of these or other variations of the script in 2008 with real roller coaster ride of oil prices at $ 90 earlier this year, $ 147 in the middle, $ 35 at the end is not possible.