JUL
10

Oil Security Index Update: Spare Capacity in Focus

 
Today, SAFE is releasing the most recent update to its Oil Security Index, the only quantitative tool designed to enable policymakers and the general public to measure and compare the relative oil security of different countries around the world.Key findings from the latest Oil Security Index include:
  • Iraq’s oil supply increased to its highest level since 1979 in Q1.
  • Growth in non-OPEC oil supply was substantial and driven primarily by the United States.
  • Unplanned oil supply outages were substantial, accounting for 3 mbd offline in Q1 due largely to disruptions from Iran, Iraq, Libya, and Nigeria.
  • Growth in Russia’s oil production remained steady year-over-year in Q1.
  • U.S. oil demand grew, but at a slower rate than in H2 2013.
  • South Africa’s oil demand declined substantially in Q1, year-over-year.
This most recent edition focuses on two critical dynamics in global oil markets: Saudi Arabia’s spare capacity, and China’s rising oil import dependence. “The Oil Security Index continues to reinforce the notion that, while rising domestic oil production is a massive benefit for the U.S. economy, it has had less of an impact on our energy security,” said Robbie Diamond, SAFE’s President and CEO. Diamond continued: “The United States ranks fifth out of thirteen countries in this update, up from sixth in April. However, oil markets remain tight and prices high due to widespread geopolitical instability. Due to our heavy level of oil dependence, high prices tend to have a more negative short-term impact on our economy than more energy efficient economies. For the United States to move higher in the Index, we need to become more efficient, particularly in the transportation sector.” The Oil Security Index’s latest analysis focuses in depth on China, a country experiencing soaring demand for personal mobility and rising oil consumption required to meet it. Since the turn of the century, China’s oil demand has more than doubled from 4.5 mbd to its current level of 10.5 mbd, adding the equivalent of today’s Canada, Mexico, and the United Kingdom combined to the marketplace. China is among the weakest in the Index in terms of “Total Spending on Net Oil Imports” and “Oil Supply Security.” The number of passenger vehicles on China’s roads has grown six-fold from 2004 to 2013, representing an increase of 90 million vehicles, and by 2035 the total number is expected to grow to over 450 million. Over time, reducing the oil intensity of the Chinese economy, and supporting the diversification China’s transportation sector through alternative fuel vehicles, will have the most meaningful effect on the country’s oil security. “China’s growing oil demand is currently unparalleled,” Diamond continued. “Geopolitically, we will see increasing involvement from China as production outages tighten supplies and elevate the risks that serious prices spikes could have on the country’s oil-dependent economy.”

You can read the full Oil Security Index and access interactive data at www.OilSecurityIndex.org. The online tool is updated quarterly and contains an interactive map featuring multiple indicators that provide an overall understanding of a nation’s complete oil security landscape.