Geopolitics of energy markets

What are the reasons (7 of them), energy has high geopolitical implications ?

• Resource rent: Hydrocarbon reserves are geographically concentrated; export revenues shape the power, budgets and stability of producing states (rentier states, “resource curse”).

• Energy security: For importers: availability, accessibility, affordability and acceptability of supply (the “4 As”). For exporters: security of demand and of revenues.

• Chokepoints and routes: Straits (Hormuz, Malacca, Bab el-Mandeb, Bosphorus), pipelines and LNG terminals are points of leverage — the 2026 closure of Hormuz is the textbook case.

• Market structure: Oil is a global, fungible market with benchmark prices; gas is still regional (pipelines, long-term contracts) but increasingly linked by LNG; coal and electricity are more local.

• Producer strategies: OPEC+ quotas, spare capacity and national oil companies are geopolitical as well as commercial instruments.

• Energy as a weapon: Embargoes, sanctions, price caps and supply cuts (1973, Russia–Europe 2022, Iran 2026) turn interdependence into leverage.

• Transition geopolitics: Critical minerals, clean-tech manufacturing (dominated by China) and power grids create new dependencies alongside the old ones.

What is the reference price in energy market? At which amount is it today?

The reference price is oil (Brent, WTI). On Sept. 25th, the WTI was 92.44 USD/bbl, after hitting 111.54 USD/bbl in May 2026. The Brent was at 104.3 USD/bbl, vs. 114 in May 2026.

What is the equation countries try to solve when it comes to energy? Is any priority made?

Equation: secure energy supply for states at an affordable price while taking climate change into account. They’ll all should be at the same level but in reality the priority is as such: Energy security - Competitiveness - Climate Change

The energy world of tomorrow will be more digital, decentralized and decarbonized.

Who is the biggest energy consumer?

China has not always consumed a lot (only since the 2000s). Historically it is the US who is the biggest energy consumer.

What share of energy consumption do fossil fuel represent? Make a ranking. How much does Nuclear, Hydro, and Other renewable energy sources?

World energy consumption by source:

1. Oil 34% 

2. Coal 28% 

3. Natural gas 25%

4. Nuclear 5%

5. Hydro 2.7%

6. Other RES 6%

→ Fossil fuel represent 87%

Please rank the energy consumption of the following regions: Europe, Middle East, Africa, North Ameria, Asia Pacific, CIS (Commonwealth of Independent States= Belarus, Russia and Ukraine), South and Central America.

World energy consumption by region: 

1. Asia Pacific 47%

2. North America 19%

3. Europe 12% (w/o Russia)

4. CIS (Commonwealth of Independent States = Belarus, Russia and Ukraine) 7% 

5. Middle East 7% 

6. South and Central America 4.4% 

7. Africa 3,6%

What is the ranking of primary use for energy consumption

How much was the total energy supply in 2025 ?

total energy supply passed 600 EJ in 2025 (+1.7%); all major sources hit record highs for the second year running.

In the increase of energy supply, what is the major source growth in the mix?

fossil fuels still ≈86% of energy supply; renewables were the largest source of growth (solar alone: 71% of it)

What is oil demand in 2025? How much has the US produced?

demand ≈103 mb/d in 2025 (+1.3%); the US produced 21.1 mb/d, almost as much as Saudi Arabia and Russia combined.

Who is the n°1 gas exporter?

US (111 Mt)

Has coal demand decreased/increased? Which region is the constituting most of the demand?

Gas demand roughly flat at ≈8.8 Bt, production ≈9.1 Bt; Asia-Pacific ≈83% of world use. 

What where 2025 energy CO2eq emissions?

CO2: energy emissions +1.1% to a record 35.8 Gt (41 Gt all sources) — still off track for net zero.

What number of mb/d crude and condensates oil and what % of LNG supply were cut from world market due to Hormuz blockage?

• Oil: around 25% of the world’s seaborne oil trade transiting the Strait

• LNG: A closure of the Strait would also have significant implications for global gas trade, as this would strand LNG exports from Qatar and the UAE, which together represent almost 20% of global LNG exports.

Combien de % de l’énergie primaire est perdue avant le consommateur en France ? Aux US ?

37% en France en 2024 pour l’essentiel relevant des centrales nucléaires, ~60% aux US en 2013

How much is EU dependent for its energy (% of its energy that is imported)?

• Europe: has cut Russian oil and gas and turned to US LNG and renewables; the EU still imports ≈58% of its energy, and the 2026 Gulf crisis exposed its new exposure to world LNG markets.

How much are China and India dependent on energy import? Which specific energy source is mainly imported in India?

China and India: remain dependent on imported oil (Middle East, Russia); India imports ≈90% of its crude.

Is Nigeria a fuel importer or exporter?

Nigeria is a fuel importer, but reduces its imports thanks to the Dangote refinery

Is Brazil a net importer or exporter?

Brazil is a net exporter (pre-salt oil, biofuels)

Is Mexico a net importer or exporter?

Mexico still imports refined products despite the Olmeca refinery.

Quelles sont les 5 étapes du processus de consommaiton d’énergie

• énergie primaire : qté d’énergie libre captée par l’homme dans la nature (pétrole, charbon, gaz naturel, uranium, eau, vent, solaire)

• énergie secondaire : issue de transformations d’énergie primaire effectuées par l’homme (élec issue de combustion de charbon, essence après raffinage du pétrole…)

• énergie livrée : énergie primaire moins les pertes liées au transport (—> et aux transformations ? Quelles pertes pour les différents types d’énergie?)

• énergie finale : énergie livrée effectivement consommé

• énergie utilisée : forme sous laquelle l’énergie satisfait le besoin final (chaleur, lumière, carburant à la pompe, électricité au compteur, gaz de chauffage). Se déduit de l’énergie finale compte tenu des pertes de l’appareil de transformation finale. 

• Par convention, la chaleur « primaire » dans les centrales nucléaires est considérée comme 3 fois plus importante que l’énergie qu’elle permet de générer sous forme d’électricité. Pour la géothermie, la chaleur primaire est comptabilisée comme 10 fois plus importante que l’énergie générée sous forme d’électricité.

What is the overall efficiency of a coal power plant, for example for lighting a home? Where are the major losses? What is the overall efficiency of a gasoline car?

For lighting a home with coal power, the Overall efficiency: 2%. Only 2 of the original 100 units end up as light. 62% of energy units are lost in heating up the chimney and cooling towers.

For a gasoline car ("well-to-wheel"), the Overall efficiency: about 13% well-to-wheel. Here the upstream part is fairly efficient (88%, or 22% of losses only), and the internal combustion engine of the vehicle is the weak link: 75% of energy units are lost with heat and friction.

What are the energy losses in France? What are their reasons? How about the US?

In France (2024)

• La consommation d'énergie primaire est de 2 577 TWh et la consommation finale est de 1 623 TWh, dont 124 TWh d'usages non énergétiques (surtout la pétrochimie).

• ≈ 37 % de pertes de transformation, de transport et de distribution, ainsi qu'aux usages internes de la branche énergie (raffineries, centrales).

• L'essentiel de ces pertes est la chaleur rejetée par les centrales nucléaires. En 2024, les pertes ont d'ailleurs augmenté surtout à cause de la hausse de la production nucléaire et des pertes de chaleur associées.

• Taux bien supérieur aux US, 60% en 2013

What is energy mainly used for worldwide? (provide a ranking)

Final consumption by sector

1. Industry 31% 

2. Transport 27%

3. Households 19% 

4. Other 13% 

5. Non-energy use 10% 

who has the most coal reserves? the most oil reserves? the most gas reserves?

Coal

1. US

2. Russia

3. China

4. Australia

5. India

6. Germany

Oil 

1. Venezuela

2. Saudi Arabia

3. Iran

4. Iraq

5. UAE

6. Kuwait

7. Russia

Natural gas

1. Russia

2. Iran

3. Qatar

4. Turkmenistan

5. US

6. Saudi Arabia

How much of the world oil supply does the Strait of Hormuz represent? What has been the impact on oil prices? On the IEA members response? On the AMericas?

• Geopolitical shock: the war with Iran (from March 2026) and the de facto closure of the Strait of Hormuz — ≈20% of world oil supply — caused a large supply disruption : >10 mb/d of Gulf output shut (IEA).

• Oil prices: Brent traded mostly between $60 and $80/b in 2025, then spiked to $118 (end-March 2026) and ≈$126 (30 April); it was back at $113 on 9 September 2026.

• OPEC+ strategies: after unwinding its voluntary cuts in 2025 to regain market share, the group lost control of supply in 2026: Saudi output fell from 8.2 to 6.0 mb/d between July and August (IEA).

• Emergency response: IEA members coordinated a record 400 mb stock release; world inventories drew 507 mb between February and August 2026. Demand: 103 mb/d in 2025 (+1.3%); the IEA expects a 2.5 mb/d fall in 2026, the first decline since 2020, concentrated in Asia.

• Americas: US (21.1 mb/d in 2025), Canada, Brazil and Guyana gain weight: the Americas now produce ≈20% more oil than the Middle East (EI 2026). 

• Sanctions: Russian crude is redirected to India and China under price caps and sanctions; Venezuela is reopening to US companies after Maduro’s removal (January 2026).

Who are the biggest oil producers? (not only crude oil)

1. US 21.1 mb/d → they import and export (crude oil) due to the different qualities of oil (light oil once refined produces more gasoline than heavy oil). US = refineries are made for light oil.

2. Saudi Arabia (7.13 EJ in 2025; 535.8 million tonnes in 2025) // 2. Russia (7.18 EJ in 2025 ; 523.3 million tonnes)

3. Canada

4. China

5. Iraq

6. Brazil

7. Iran

8. UAE 

→ The biggest producers are non OPEC. 

Oil reserves: countries, % of oil reserves held by the top 10, 4 reasons why big reserves =/= high production

Oil reserves 

• Top 10 countries hold ~85% of world proven oil reserve (~1730 billion barrels)

• Estimates differ by source (uncertainty and complexiness in obtaining the data): Canada’s oil sands or not changes its reserves from ~170 to ~4 Bn bbl. 

• Venezuela has the largest reserves but produces only ~1 mb/d. In the US, with far smaller reserves, produces 13.6 mb/d (shale). After Maduro’s removal (January 2026), US licences reopened the sector, but recovery requires years of investment. 

Why big reserves don’t always mean high production

• Technology & geology: shale, horizontal drilling and fracking raised US recovery rates; heavy/extra-heavy crude is harder and costlier to produce.

• Investment & infrastructure: under-investment, ageing facilities, limited refining/diluent access constrain flows (e.g. Venezuela).

• Politics & sanctions: instability and sanctions (Iran, Venezuela, Russia) restrict finance, equipment and market access.

• Market & policy signals: OPEC+ quotas, spare capacity, carbon policies and price cycles shape how fast reserves are developed — and in 2026, physical access to Hormuz.

Country Oil Reserves (billion barrels, 2025)

1. Venezuela 303.2

2. Saudi Arabia 267.2

3. Iran 208.6

4. Canada 171.0

5. Iraq 145.0

6. United Arab Emirates 113.0

7. Kuwait 101.5

8. Russia 80.0

9. Libya 48.4

10. United States 47.1

Oil consumption: top 10 exporters, % of world consumption they represent, dynamic (growth and decrease drivers).

Oil consumption

• Concentration: the top 10 account for ≈60% of world oil consumption (199 EJ in 2024). 2025 (EI 2026): world 103.0 mb/d; United States 19.4 mb/d, China 17.4 mb/d, India 5.6 mb/d. 

• Growth: non-OECD demand +2% in 2025 vs +0.4% in the OECD; China’s growth is slowing (EVs, LNG trucks), India is the main source of growth.

• 2026: the IEA expects world demand to fall by 2.5 mb/d because of the Hormuz shock.

1. US 

2. China 

3. India

4. Russia 

5. Saudi Arabia

6. Japan

7. South Korea

8. Brazil

9. Canada 

10. Germany

In Europe and in the US, how much does those activities represent in petroleum consumption: houselholds, services, industry, transport, energy sector?

Oil importers: top 10, their % in oil exports

Oil imports

• The top 10 importers account for ≈60% of world gross oil imports (crude + products: 76.1 mb/d in 2025).

• Asia: China alone takes ≈18% of world imports; India has sharply increased purchases of Russian crude since 2022; Japan and Korea rely on the Middle East for most of their crude — hence their exposure to the 2026 Hormuz closure.

• Europe: after the embargo on Russian crude (Dec. 2022) and products (Feb. 2023), Europe still relies heavily on imports; the Netherlands (Rotterdam) and Singapore are trading and refining hubs.

• United States: still the #2 gross importer (7.9 mb/d, mainly heavy crude from Canada) although it has been a net exporter of crude and products since 2020.

Oil imports 2025

1. China (18%) 

2. US

3. India

4. South Korea

5. Japan

6. Singapore

7. Netherlands 

8. Germany

9. Spain

10. France

Natural gas producers. How much does the US account for in total production?

Natural gas producers = 74% (in bcm, 2025)

1. US 1 074 (26% of world’s input)

2. Russia 609 

3. Iran 265

4. China 264

5. Canada 206

6. Qatar → They had a lot of gas but before 2000s it was not commercially viable yet to liquefy and sell LNG. 

7. Australia

8. Saudi Arabia

9. Norway

10. Algeria

Natural gas reserves (top 3 at least)

Natural gas reserves = 80%

1. Russia

2. Iran

3. Qatar 

= 50%

4. Turkmenistan

5. US

6. Saudi Arabia

7. UAE

8. Venezuela

9. Nigeria 

10. Algeria

Who are the 4 biggest gas consumers? Who is also very dependent on gas imports?

Gas consumers =~64% of world demand

1. US 

2. Russia 

3. China 

4. Iran

5. Canada

6. Saud Arabia

7. Mexico

8. Japan 

9. Germany 

10. UAE

→ The four largest consumers are also large producers; Mexico, Japan and Germany depend on imports (US pipeline gas for Mexico, LNG for Japan, LNG and Norwegian gas for Germany).

What is natural gas used for?

Global natural gas consumption

• Electricity generation · 39%

Natural gas fuels power plants, including combined-cycle turbines.Gas-fired plants can adjust output to changing electricity demand.

• Industrial uses · 28%

Manufacturers use gas for process heat and as a feedstock, notably for chemicals and ammonia used in fertilisers.

• Residential and commercial · 20%

Homes and businesses use gas mainly for space heating, hot water and cooking. Demand varies with the weather.

• Transport · 2%

Compressed and liquefied natural gas fuel road vehicles and some ships.

• Other uses · 11%

Includes uses beyond the four sectors above, such as energy-sector operations.

Gas and LNG imports: First 3 gas then 3 first LNG importers ; Role/dynamics of Europe, Asia regarding gas and LNG imports.

Gas importers 

• Net imports = consumption − production (2024, EI data). The EU as a whole imported ≈290 bcm net.

• Europe’s shift to LNG: after the loss of most Russian pipeline gas, Europe relies on LNG (US, Qatar) and Norwegian pipeline gas.

• Asia’s growing demand: China (pipeline from Russia and Central Asia + LNG), Japan, Korea and India are the core of the LNG market.

• Mexico: the fourth largest net importer, almost entirely supplied by US pipelines.

• Energy security: diversification of suppliers and routes, storage obligations and long-term contracts regained value after 2022 — and again in 2026.

Country Net imports 2024 (bcm)

1. China 186

2. Japan 91

3. Germany 75

4. Mexico 64

5. South Korea 64

6. Italy 56

7. Türkiye 51

8. India 38

9. France 32

10. United Kingdom 31

LNG imports

• The top 10 LNG importers took ≈317 Mt in 2025, ≈73% of world LNG trade (437 Mt). 

• Europe: reclaimed its role of “balancing market”: 126 Mt imported in 2025 (+26 Mt), after the end of Russian transit through Ukraine.

• Asia: China fell by 8.9 Mt (mild winter, more domestic and pipeline gas) but remains #1; Japan and Korea are stable; India and Taiwan are growing. 

• 2026: the loss of Qatari supply forced Asian and European buyers to compete for Atlantic cargoes; at least eight cargoes were diverted from Asia to Europe.

Country and LNG Imports 2025 (Mt)

1. China 69.8

2. Japan 67.4

3. South Korea 48.7

4. India 24.6

5. Taiwan 24.2

6. France 21.6

7. Spain 16.9

8. Netherlands 16.3

9. Italy 15.1

10. Türkiye 12.4

What is the gas reference price used in Europe? What are other gas price references? Provide ordres de grandeur.

Gas reference prices

TTF = the one we use in Europe. The Title Transfer Facility (TTF) is a virtual trading point on the Dutch gas grid. It isn't a physical place: any gas inside the Dutch network can change hands there. Since the mid-2010s it has overtaken the UK's NBP as the reference price for gas in continental Europe, and it is now also a key price for global LNG. 

Other gas references

Hub	Region	Unit
NBP	UK	pence/therm
THE, PEG, PSV, PVB, ZTP	Germany, France, Italy, Spain, Belgium	€/MWh (usually a spread to TTF)
Henry Hub	US	$/MMBtu</span></p></td></tr><tr><td colspan="1" rowspan="1" style="border-width: 0.5pt; border-style: solid; border-color: rgb(183, 183, 183); vertical-align: top; overflow: hidden; overflow-wrap: break-word;"><p style="text-align: justify;"><span style="background-color: transparent;"><strong>JKM</strong> (Platts)</span></p></td><td colspan="1" rowspan="1" style="border-width: 0.5pt; border-style: solid; border-color: rgb(183, 183, 183); vertical-align: top; overflow: hidden; overflow-wrap: break-word;"><p style="text-align: justify;"><span style="background-color: transparent;">Asia LNG (Japan/Korea)</span></p></td><td colspan="1" rowspan="1" style="border-width: 0.5pt; border-style: solid; border-color: rgb(183, 183, 183); vertical-align: top; overflow: hidden; overflow-wrap: break-word;"><p style="text-align: justify;"><span style="background-color: transparent;">$/MMBtu

Price history

• Before 2021: about €15–25/MWh.

• 2022 energy crisis: Russian supply cuts sent it to a record of about €340/MWh (intraday, August 2022).

• 2024–2025: about €30–45/MWh.

• 2026: the Hormuz closure took about 20% of global LNG (Qatar and the UAE) off the market. TTF was around €45/MWh in May–July, rose to about €53 in August and €62 in September. It now trades at about €73/MWh, near its 52-week high, in early October.

Coal demand/production, impact of the Hormuz shock, 2 countries who keep coal central for their security of supply.

Coal

• Coal is not dead, althoug demand is roughly flat in 2025 at ≈8.8 Bt (IEA); China stable at ≈4.96 Bt, India 1.30 Bt (−1%), US +9.5%, EU −6%. Asia-Pacific ≈83% of world use.

• Production: close to its record at ≈9.1 Bt in 2025 (China 4.71 Bt, India ≈1.1 Bt); a first decline (−0.7%) is expected in 2026 as inventories are high.

• Trade: world coal imports fell 4% to 1.48 Bt in 2025, mainly because China imported less; Indonesia is the top exporter (517 Mt of thermal coal), Australia leads coking coal.

• 2026: the Middle East gas shock pushed some power systems back to coal: the IEA now expects demand to rise 1.2% to 8.94 Bt.

• Energy security vs climate: advanced economies keep phasing coal down, while China and India keep it central for security of supply, even as solar booms.

Coal producers and Coal reservers top 5

Coal producers

• The top 10 coal-producing countries account for ≈94% of world coal production (2024, energy content).

• China alone produces ≈52% of the world total, followed by India, Indonesia, Australia and the United States.

• 2025 (IEA): world ≈9.1 Bt; China 4.71 Bt; India ≈1.1 Bt.

• Measured in energy content (EJ) rather than tonnes, because coal quality varies widely (Indonesian and Indian coal have a low calorific value).

Country Production 2024 (EJ)

1. China 94.5

2. India 18.1

3. Indonesia 17.0

4. Australia 11.8

5. United States 10.6

6. Russia 9.1

7. South Africa 5.6

8. Mongolia 2.0

9. Kazakhstan 1.9

10. Colombia 1.5

Coal reserves

1. US 23%

2. Russia 15% 

3. Australia 14% China 14% 

4. India 10% 

5. Germany, Indonesia, Ukraine 3% 

Coal consumers

Coal consumers

• The top 10 coal-consuming countries account for about 89% of world coal consumption (2024). 

• China alone ≈55.8%, India ≈13.9%, followed by the US (≈4.8%), Indonesia (≈2.9%), Japan (≈2.7%), Russia (≈2.3%), South Africa (≈2.1%), South Korea (≈1.7%), Vietnam (≈1.5%) and Türkiye (≈1.1%).

• 2025 (IEA): China ≈4.96 Bt, India 1.30 Bt, US 410 Mt (+9.5%); world ≈8.84 Bt.

Country Consumption 2024 (EJ)

1. China 92.2

2. India 23.0

3. United States 7.9

4. Indonesia 4.7

5. Japan 4.5

6. Russia 3.7

7. South Africa 3.5

8. South Korea 2.9

9. Vietnam 2.5

10. Türkiye 1.8

What are 4 different “ranks” of coal? What are the 2 key end use for coal?

Types of coal by rank

Coal is classified by "rank", which reflects how much heat and pressure it went through over geological time. The higher the rank, the more carbon, the less moisture and the more energy per tonne.

Rank	Carbon	Energy content	Main use
Lignite (brown coal)	~25–35%	Low, ~10–20 MJ/kg	Power plants next to the mine (too wet and heavy to transport far), e.g. Germany, Poland
Sub-bituminous	~35–45%	~18–25 MJ/kg	Power generation, e.g. US Powder River Basin, Indonesia
Bituminous	~45–85%	~24–35 MJ/kg	Power and steelmaking (the most traded coal)
Anthracite	~85–95%	~30+ MJ/kg	Niche uses: heating, some metallurgy, filtration

Classification by use: thermal vs metallurgical

In markets and company reporting, the key split is by end use, not rank.

Thermal coal (steam coal)

• Burned for its heat, mainly to generate electricity, and in industry, notably cement. 

• Mostly sub-bituminous and lower-grade bituminous.

• What matters is the calorific value (kcal/kg), plus ash, sulfur and moisture content.

• Price benchmarks in $/t: Newcastle (Australia, 6,000 kcal/kg, the Asian reference), API2 (delivered to Amsterdam–Rotterdam–Antwerp, the European reference) and API4 (Richards Bay, South Africa).

• Main players: China and India produce and consume the most; Indonesia and Australia are the top exporters.

Metallurgical coal (met coal)

• Used in steelmaking through the blast furnace / basic oxygen furnace (BF-BOF) route, which makes about 70% of world steel.

• High-quality bituminous coal.

• It covers two sub-types:

1. Coking coal

• It is heated up to about 1,000 °C without oxygen in coke ovens to produce coke, a hard, porous, almost pure carbon material.

• In the blast furnace, coke does three things at once:

  • it is the fuel;

  • it is the reducing agent, removing oxygen from iron ore;

  • it is the structural support, letting gases flow through the furnace.

• Its key property is the ability to soften, swell and re-solidify into strong coke. Only certain coals do this.

• Grades, in decreasing quality and price: hard coking coal (HCC), which is the premium grade, then semi-hard and semi-soft coking coal.

2. PCI coal (pulverised coal injection)

• It is ground and injected directly into the blast furnace to replace part of the expensive coke.

• It is metallurgical coal but not coking coal, because it doesn't need coking properties.

Coal exporters (top 4)

Coal exporters

• Figures: thermal coal, plus coking coal for Australia (209 Mt thermal + 142 Mt coking). Coal trade is highly concentrated: Indonesia and Australia alone supply more than half of internationally traded coal (1.48 Bt in 2025). 

• Russia redirected its exports to Asia after the EU embargo (August 2022); US exports declined in 2025; Mongolia is a growing overland supplier of coking coal to China.

Country Exports 2025 (Mt)

1. Indonesia 517

2. Australia ≈351

3. Russia ≈130

4. Colombia 45

Coal imports

Coal importers

• Seaborne thermal coal trade fell ≈5% to ≈946 Mt in 2025, below its 2019 level, as China (−12%) and India (−3%) imported less; Vietnam and Korea increased purchases.

• Asia accounts for ≈89% of imports; China and India together ≈48%.

• Including coking coal and overland trade, China imported ≈495 Mt in 2025 (vs ≈548 Mt in 2024).

Country Imports 2025 (Mt)

1. China 304

2. India 157

3. Japan 100

4. South Korea 76

5. Vietnam 45

6. 
   

12 market indicators for oil

• Prices and expectations 

  • Brent and WTI prices: the combined result of supply, demand and expectations (OPEC+ quotas, US inventory data with EIA report every Wednesday, the dollar and geopolitics). 

  • Futures time spreads: backwardation may signal a tight market; contango may encourage storage.

  • Oil volatility: uncertainty about future prices. 

  
  Supply and market power

  • OPEC+ production decisions and compliance: intended cuts versus actual output.

  • Spare production capacity, especially in Saudi Arabia (called the pivotal actor, able to produce a lot, not the highest reserves but can increase and decrease the production to maintain the total quota in the cartel): the ability to replace lost barrels, but also in the US. 

  • Unplanned outages and US shale activity: disruptions and the response of other producers.

  
  Trade flows and transport

  • Exports from sanctioned producers: how much oil still reaches the market, and where. 

  • Crude price differentials: discounts or premiums relative to Brent.

  • Chokepoint traffic, tanker freight and war-risk insurance: the cost of moving oil.

  • Chinese and Indian imports: changes in demand and destinations. 

  
  Buffers and producer vulnerability

  • Commercial inventories and strategic petroleum reserves: barrels available during a disruption. 

  • Fiscal break-even prices and sovereign credit risk: producers’ exposure to lower oil revenues. They’ll decide on their budget given the oil price.

What is global oil demand on average?

Global oil demand is around 100 million barrels per day, including crude oil and other liquid fuels: more than 1,100 barrels every second.

Is oil more traded than gas?

Oil is mainly traded. Not the case for natural gaz: when you produce it you consume it.  Around 55% of oil production is traded internationally, compared with 23% of natural gas production. The financial market in 7 times bigger than the physical market.

How many liters in a barrel?

One barrel contains 159 litres of crude oil, equivalent to approximately 1,600 kWh of thermal energy.

It's not 159 litres of petrol. Refining splits it into petrol (about 40–45%), diesel and jet fuel (about 30–35%), and heavier products.

1,600 kWh of thermal energy is;

> Home electricity: About 4 to 5 months of a typical European household's electricity use (roughly 3,500–4,500 kWh a year)
> Home heating: About 1 to 2 months of winter heating for an average house

For what share of global energy demand does oil account for?

Oil remains the world’s largest source of energy, accounting for just under 30% of global energy demand.

What is oil mainly used for?

Transport is the largest source of oil demand. Road transport alone accounts for around 45% of global oil use. In the US, 72% of oil is used for transport, in the Europe, it’s 62%.

What is oil rent? What order of magnitude?

• Economic rent = (price received − full economic cost per barrel) × barrels sold 

(Total revenues - total costs). Full economic cost includes exploration, development, extraction and a normal return on capital. 

• Cost differences: Oil from a low-cost field earns more rent than oil from a high-cost field sold at the same price. Each actor will have its own rent. 

• Scarcity: A barrel extracted today cannot be sold tomorrow. Oil left underground has an opportunity value. 

• Market power: By restricting output, a producer group may raise the market price and the rent earned per barrel. Its total rent does not necessarily rise, because it sells fewer barrels. 

• Key idea: The oil price is common to many producers; the rent earned by each producer is not.

Germany 2025 GDP PPP 6.3 Tn

France 2025 GDP PPP 4.4 Tn

According to the WB, it is equivalent to 1.5 to 2% of world’s GDP (1.4% in 2021, latest available data).