estimate of maximum oil price

diemos · Tar Sands Joined: Sep 23, 2005 Posts: 64

80e6 barrels/day x 120 dollar x 365 days = 3.5T$/year to pay for world oil production.

The CIA factbook lists world GDP as 54T$/year so 6.5% of world GDP goes to pay for oil.

At $1800/barrel the entire world economic output would be handed over to the owners of oil in exchange for their black gold so that's the theoretical maximum that the price of oil could reach. (in constant dollars ignoring inflation/deflation).

I'm going to assume that the world polity will not tolerate more than about 20% of world GDP being handed over to the current owners of the oil before that oil is redistributed by force so I'll guess that oil won't go above $360 in constant dollars without a world war.

Micki · Posted: Fri May 16, 2008 1:57 am Post subject: Re: estimate of maximum oil price

thylacine · Heavy Crude Joined: Jan 19, 2006 Posts: 113

I'm not sure how valid or not the 20% GDP is as a trigger for war, but it's certainly an interesting way of looking at the issue.

I found this site: Mr Dowlings interactive table of the nations of the world , cut and pasted the data into excel and had a look at what sort of pain various countries are in.

At $125 per barrel: Singapore (29%); Cuba (24%); Jordan (18%).

At $200 (possible spike this year?): Syria (24%); Belarus (26%)

The ones to keep an eye on are the non-oil-producing nations, shelling out large chunks of GDP and that sit adjacent to oil producers. Countries like Egypt, Syria, Jordan, Israel, Lebanon?

Rage · Tar Sands Joined: May 06, 2008 Posts: 25

How does the sale of oil figure in calculating the GDP? Is every dollar of oil profit a dollar on the producing countries GDP? Would produces spend a smaller percentage of GDP as the cost goes up?