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Page added on December 7, 2016
Middle East Oil Exports Lower Than 40 Years Ago
Yes, it’s true. Middle East net oil exports are less than they were 40 years ago. How could this be? Just yesterday, Zerohedge released a news story stating that OPEC oil production reached a new record high of 34.19 million barrels per day. To the typical working-class stiff, driving a huge four-wheel drive truck pulling a RV and a trailer behind it with three ATV’s on it, this sounds like great news.
Unfortunately for the Middle East, this isn’t something to celebrate. Why? Well, let’s just say, there’s more to the story than record oil production.
While the Middle East oil companies were busy working hard (spending money hand over fist) to produce this record oil production, their wonderful citizens were working even harder to consume as much oil as they could get their hands on.
In the past 40 years, Middle East domestic oil consumption surged more than six times from 1.5 million barrels per day (mbd) in 1976, to 9.6 mbd in 2015. This had a seriously negative impact on rising Middle East oil production:
According to the 2016 BP Statistical Review, the Middle East produced 30.10 mbd of oil in 2015 compared to 22.35 mbd in 1976. This was a growth of 7.75 mbd. However, Middle East domestic oil consumption increased from 1.51 mbd in 1976 to 9.57 mbd in 2015. Thus, the Middle Eastern economies devoured an additional 8.06 mbd of oil during that 40 year time-period.
NOTE: The production data shown in the chart above only represents Middle East oil production. OPEC members not included are Algeria, Angola, Ecuador, Gabon, Libya, Nigeria and Venezuela. I only listed the production data for the Middle East as the data was readily available.
Regardless, if we look at the two bars on the right side of the chart, we can see that Middle East net oil exports were higher in 1976 at 20.84 mbd versus 20.44 mbd in 2015. Basically, all the hard work the Middle East oil companies spent on increasing production over the past 40 years went to supplying their own insatiable domestic consumption.
Here is a breakdown of the some of the Middle Eastern countries oil consumption:
In 1976, Kuwait only consumed 84,000 barrels per day (bd) of its own oil, but this jumped nearly ten times to 818,000 bd in 2015. While Iran’s oil consumption increased nearly four times from 1976 to 2015, Saudi Arabia wins the award, as its economy is now consuming a staggering eight times as much oil than it did during the same time period.
If we look at it another way, Middle East domestic oil consumption now represents 32% of its overall production compared to only 7% in 1976:
This is definitely bad news for the Middle Eastern National Oil Companies. If these oil companies are spending a lot of their oil profits just to increase production to feed their growing domestic economies, what happens when production finally starts to decline? This is what Jeffery Brown wrote about when he developed his Export Land Model:
It models the decline in oil exports that result when an exporting nation experiences both a peak in oil production and an increase in domestic oil consumption. In such cases, exports decline at a far faster rate than the decline in oil production alone.
The Export Land Model is important to petroleum importing nations because when the rate of global petroleum production peaks and begins to decline, the petroleum available on the world market will decline much more steeply than the decline in total production.
A perfect example of this is Indonesia. Indonesia has been a part of OPEC for decades. However, it is now consuming more oil than it produces:
This is an older chart from a 2012 Silverseek presentation, but we can clearly see that Indonesia’s net oil exports declined significantly since 1980. In 1980, Indonesia’s net oil exports were 1.18 mbd versus net imports of 489,000 bd in 2011. And according to the 2016 BP Statistical Review, Indonesia’s oil production has fallen to 825,000 bd compared to domestic consumption of 1.63 mbd.
Thus, Indonesia had to import 805,000 bd of oil in 2015 just to meet its domestic oil consumption. Which is why I found this article on Zerohedge completely hilarious, Vienna Shocker: Indonesia Suspended From OPEC:
But the most shocking announcement is that Indonesia appears to have been suspended from OPEC, and that its oil output, which according to the latest OPEC monthly report was 722kpd, will be distributed among other OPEC nations, in what may amount to a production “shuffle” not a cut.
Why in the living hell is OPEC getting so worked up about Indonesia? Not only should Indonesia be suspended from OPEC, it should be kicked out. I have nothing against Indonesia, but why is Indonesia still apart of OPEC if it is now importing 805,000 bd more oil than it is producing… who cares?
Why isn’t that mentioned in the Zerohedge article?
Now, what happened to Indonesia is also taking place in the Kingdom of Saudi Arabia. The chart below shows the damaging impact of rising domestic oil consumption on rising production:
The olive-green color in the chart represents Saudi Arabia oil production, while the orange denotes net oil exports and the red is their domestic consumption. In 2005, Saudi Arabia’s net oil exports were higher at 8.72 mbd versus 8.12 mbd in 2015. This was due to Saudi’s domestic oil consumption increasing 1.5 mbd in the past ten years.
Even though Saudi Arabia’s total oil production reached a new high of 12 mbd in 2015 compared to 10.9 mbd in 2005, its domestic economy consumed all of that extra increase, and more.
What happens when Saudi Arabia’s oil production finally declines and heads south as its domestic oil consumption increases? Well, we can look above at Indonesia as a perfect example. This is the double whammy most folks in the Mainstream or Alternative media fail to understand.
Unfortunately, most precious metals investors do not read my energy articles. I have had this discussion with several websites that I do interviews with. For some strange or silly reason, most people put “Energy” into a category such as “Health Care”, “Transportation”, “Housing” and “Technology Stocks” for an example. They just look at Energy as a separate industry that they don’t have to pay any attention to.
This is the most frustrating and at the same time “ABSURD & INSANE” thing I have to deal with on an ongoing basis. I plan on writing more articles in the future on why ENERGY IS THE KEY to everything, especially the precious metals.
The world economies are in big trouble and they don’t even know it. While oil depletion is by far the number one NAIL IN THE COFFIN, falling Middle East (and other OPEC members) net oil exports will be number two.
Time to wake up and smell the coffee.
19 Comments on "Middle East Oil Exports Lower Than 40 Years Ago"
makati1 on Wed, 7th Dec 2016 8:05 pm
No surprise there. All oil exporting countries, with a few exceptions, are exporting less oil than even last year. And the trend will continue until no one exports oil or has any for domestic use. That time in in YOUR lifetime if you are under 60.
Apneaman on Wed, 7th Dec 2016 8:33 pm
OMG! Another super duper piece of shit article about the cancer juice.
What could be more important than some shit from forty years ago?
Cancer juice consequences
Arctic Air Temperatures are Set to Hit 35 to 55 F Above Average by Thursday — Out of Season Sea Ice Melt Possible, Again
” Record low sea ice extent values have occurred for more than 50 percent of days measured. And well above average temperatures have invaded the Arctic during winter, spring, and fall. With another huge wave of ridiculous warmth building up over eastern Siberia this week, the hits just keep on coming.”
-Major Warming Over Siberia, Chukchi and East Siberian Seas
-Warm Winds May Cause Unprecedented Back-to-Back Fall Sea Ice Melt
“During mid November, a period of unprecedented warming produced an almost unprecedented period of fall melt. A similar November melt occurred during 2013. But the amount of melt then was smaller. And that melt did not occur at a time when Arctic sea ice values were at new record lows — as they were throughout the entire month during 2016. ”
https://robertscribbler.com/2016/12/07/arctic-air-temperatures-are-set-to-hit-35-to-55-f-above-average-by-thursday-out-of-season-sea-ice-melt-possible-again/
This is not normal, people: Arctic and Antarctic hit record low sea ice
“Sea ice extent averaged 3.51 million square miles for the month, which was 753,000 square miles below the 1981-2010 average for the period, according to data released Tuesday by the National Snow and Ice Data Center (NSIDC) in Boulder, Colorado.
The section of missing ice was about the same size as the entire country of Mexico. Or to put it in terms of U.S. states, the missing ice is greater than the states of Texas, California, Montana and New Mexico combined.”
http://mashable.com/2016/12/06/arctic-antarctica-sea-ice-records/#O7mJjPoe6aqC
One big step closer to the Arctic Blue ocean event.
Apneaman on Wed, 7th Dec 2016 9:49 pm
LMAO and loving it. Only in America indeed.
An Open Letter from Scientists to President-Elect Trump on Climate Change
More than 800 Earth scientists and energy experts (and counting) urge the incoming president to take six crucial steps
“President-elect Trump has called climate change a Chinese hoax, vowed to dismantle America’s climate and clean energy policies, and appointed climate deniers with ties to the fossil fuel industry to his transition team and Cabinet.
In response, more than 800 Earth science and energy experts in 46 states have signed an open letter to Donald Trump, urging him to take six key steps to address climate change to help protect “America’s economy, national security, and public health and safety.”
All signatories are pursuing or hold a PhD in relevant disciplines, with a few exceptions for other leaders in the field. All are either American or work in the United States.”
https://blogs.scientificamerican.com/observations/an-open-letter-from-scientists-to-president-elect-trump-on-climate-change/
Trump to name Scott Pruitt, Oklahoma attorney general suing EPA on climate change, to head the EPA
“On his Linked In page, Pruitt boasts of being “a leading advocate against the EPA’s activist agenda.”
https://www.washingtonpost.com/news/energy-environment/wp/2016/12/07/trump-names-scott-pruitt-oklahoma-attorney-general-suing-epa-on-climate-change-to-head-the-epa/?utm_term=.189776c58516
As far as AGW goes Trump and his troupe of talking baboons can’t make it any worse unless they shut down natgas frackers so coal can come back in America. They can fuck folks up on the local level – worse pollution of air & water, etc. The biggest effect this will have is it will be yet another blow to America’s international standing. Many folks the world over are still under the illusion that they can save themselves and their descendants – can’t. Trump has made a fine scapegoat for the failure of the entire species. This could be happening on the subconscious level. Trump hasn’t served a day yet, but is being blamed for all sorts of climate shit. Many of things they are claiming will happen because of him have already happened and many horrors are in the pipe and cannot be stopped. Scapegoating is one of the human’s favorite sports.
makati1 on Wed, 7th Dec 2016 10:53 pm
Ap, so correct! I stopped pointing out that fact as they are blind and deaf to the idea that they have the biggest share of the blame for their predicament, not others. 25+% share of the consumption of the worlds resources means at least 25% of the blame for the climate change and the much shortened and brutal future for their kids and grands. That 4X4 of reality is soon to hit the American face of denial.
joe on Thu, 8th Dec 2016 12:32 am
No, its Islam, and Commies! The west did too good of a job lying to muslims that they supported freedom of religion if only the arabs could fight Russia for us. They did that and their reward has been unfettered access to the western world. The problem is that Islam is a system of living AND a religion. The neocons/neoliberals didnt bank on that. Theres a reason why your nice muslim neighbour will smile at you but his wife and children wont look you in the eye, and that is because they secretly hate you because their religious texts tell them that they have to tolerate your existence even though you are a filthy Christian worse than a dog. I have lived long enough to learn that ‘tolerance’ for a liberal means burying their head in sand and ‘tolerance’ for a muslim means ‘we will put up with you untill we can do somthing about you’. Thats the modern tolerant western society, its a lie we tell ourselves so we dont have to face up to reality. Opec is another lie, Trump himself said if opec follwed the law they would have to put themselves in jail, its a cartel, and cartels are against free market principles, yet successive US goverments have always more or less supported opec nations until they broke that tradition in 2003 and invaded Iraq, then again with Libya with the bombing campaign, totally undermining opec and then supporting fraking. The world is full of hypocrisy and confusion and lies and deceits, and thats human nature, we should expect no less that liberals got it wrong about tolerance as right wingers are wrong about the world they think they are restoring. Its enough that we can live our lives in peace and a small bit of success regardless of religion or race, but thats not the society we are building. We are the Inca, the Khymer, the Easter Islanders. Nothing more. A man recently told me confidently that no multicultural society ever lasted, they all broke down eventually. I asked him if he knew of any society that ever lasted ever. Isis wants to restore the society of the original muslims because they know that mohammads society vanished long ago. Soon oil will as useless as it is to look at, because half of society will use battery powered cars using gas fired electricity while the other half of society wilo be too poor to afford such a car getting basic sustainence from the ‘welfare’ state. People will identify more and more by race and religion because thats exactly what liberals tell them they should do and so society will slowly fracture.
Cloggie on Thu, 8th Dec 2016 6:22 am
Israel bombing Damascus military airport:
https://www.rt.com/news/369501-israeli-rockets-strike-damascus-airport/
These folks obviously don’t like that Assad almost won back Aleppo and now they help their IS proxy fighters to try to curtail the Syrian air force.
IS = neocons = Israel = America = West
History: PNAC/neocons –> 9/11 false flag –> Afghanistan, Iraq, Syria
And it is all going to fail. The Middle East will NOT be colonized by the West but instead by Turkey that will re-Islamise and will give the finger to the EU and the rest of the West. And it is only a matter of time until the West will lose KSA and Egypt as well.
Allah Akhbar!
The folks behind it all…
http://tinyurl.com/nm8j9v9
…are not as smart as they like to think they are.lol
The geopolitical consequence of the West losing the Middle East will be that for energy security reasons Europe will have no choice but to approach Russia.
Jef on Thu, 8th Dec 2016 6:46 am
How much “Middle East Consumption Of Domestic Oil Production” has been quashed due to massive infrastructure destruction by US/NATO bombing back to the stone age?
shortonoil on Thu, 8th Dec 2016 6:55 am
“So, stick around a while and wait for the disntegration of the Global Oil Industry within the next decade.”
It may not take that long Steve. Our projections place the price of oil at $23 by sometime in 2020. The Middle East will burn when 375 million people can no longer be fed from the petroleum nibble. This is going to get real ugly, real fast. The world is now spending $2.7 trillion more per year to produce oil, and its produces than what that same quantity of oil can power in economic activity. By 2030 that will have amounted to $39 trillion in total.
Because oil is the premier energy provider for our modern technological civilization, its declining ability to deliver that energy will only exacerbate our already stressed monetary financial system. The next depression, a resource depression, will be unparallelled in human history. When it becomes generally understood that $250 trillion in world debt is never going to be repaid, and never can be repaid — duck. When creditors realize that they will never get their money back the credit system stops. The wheels are going to be flying off this buggy in every direction! Credit will just become another 4 letter word.
http://www.thehillsgroup.org/
Davy on Thu, 8th Dec 2016 7:16 am
Those who lack intellectual strength with global economic realities will talk carelessly about the either or of gaining or losing the Middle East from the point of view of energy. From the point of view of the oil markets the ME must remain a global market. It is glaringly evident that ME oil must be marketed and in significant amounts or all ME states fail. The speed of collapse may very but the end result will not. Every single one of the ME oil exporters are dangerously exposed to oil exports at amounts that can only be achieved through healthy global markets. Even now with relatively healthy global markets all ME nations are suffering. There is no losing or gaining the ME for any actor and remaining whole. The ME is only economically viable with global oil markets. No ME state including Iran will function properly without healthy global oil markets. We know the effects on the west and the west’s dangerous dependence on healthy global markets of which oil is profoundly important. It is clear western markets will be torn apart by a major disruption to ME oil. This includes Russia who is a hybrid of the ME and the west.
This reality cannot be explained using 20th century history. We are now in a new normal of the 21’st century. This is a no win situation for all parties unless the actor disrupting ME oil supplies is seeking a destructive end for all involved. A disruptive war or action that could remove oil to the west will destroy the global economy so that any ME actor that is responsible for removing that oil from global markets will itself be so damaged as to not be a victor. There is no turning to Russia by Europe as an alternative either. The time it would take for Europe to shift to Russian sources is too long to be adaptable. In the interim of such a disruption Europe and Russian economies would be crushed just like others with cascading failures. This is not a game it is a system of survival. If you play it like a game it will self-destruct.
OFT on Thu, 8th Dec 2016 7:59 am
The reduction in ME hydrocarbon exports, as a result of increased domestic consumption is, in itself, a significant concern for these countries. More worryingly for them is the dependance they have upon fossil fuels for their overall economies.
We are all aware that their economies rely on oil and gas – but to what extent? A state like Saudi Arabia gets around 45% of its GDP from HCs, and about 80% of all exportable revenue. The US and Europe, by contrast, get <5% of GDP and are net importers of HCs.
Revi on Thu, 8th Dec 2016 8:18 am
Saudi Arabia has been eating into its sovereign wealth fund to keep business as usual going in the country. What happens when it gets used up? Does business as usual continue? Can they borrow trillions to keep it going like we do? We’ll see.
Annonymous on Thu, 8th Dec 2016 6:42 pm
@short
“Following our graph, which we are 99% confident is accurate, oil prices by 2020 will be about $208/barrel, or $6.88/gal for transportation fuels. This is probably survivable, but by 2025 those prices will have advanced to $329/barrel and $10.90/gal.”
http://www.theoildrum.com/node/9811/944630
How is that your Etp model comes to such vastly different price predictions now than it did in the past?
Boat on Thu, 8th Dec 2016 7:19 pm
Davy,
Nice post. Of course the ME is dependent on a healthy oil market and the world on them. That is why the US is invested in the area. For U.S energy security for sure but also world energy security.
Boat on Thu, 8th Dec 2016 7:35 pm
GE and Haliburton announced a 34 billion investment in automated drilling to be completed by 2020. Clean drilling, no need for porta potties. They obviously think the hills group and supporters are full of shyt.
GregT on Thu, 8th Dec 2016 9:11 pm
“Of course the ME is dependent on a healthy oil market and the world on them. That is why the US is invested in the area.”
Right Boat. Those people in the ME are volunteering to be brutally murdered, just so the US can ‘invest’ in their resources.
Get your head out of your asshole Kevin. Mindless fucking idiot.
GregT on Thu, 8th Dec 2016 9:36 pm
GE and Haliburton announced a 34 billion investment in automated drilling to be completed by 2020. Clean drilling, no need for porta potties. They obviously think the hills group and supporters are full of shyt.
Come on Kevin. Even somebody as stupid as yourself should be able to come up with better nonsense than that.
brough on Fri, 9th Dec 2016 6:03 am
Meanwhile back in the UK.
We’re sending over our best diplomat.
Boris Johnson arrives in Saudi tomorrow morning.
Cloggie on Fri, 9th Dec 2016 7:08 am
We’re sending over our best diplomat.
Boris Johnson arrives in Saudi tomorrow morning.
A few recent headlines:
https://www.theguardian.com/commentisfree/2016/dec/08/saudi-arabia-boris-johnson-yemen-arms-sales-riyadh
“This time it’s Saudi Arabia: even when Boris Johnson gets it right, he’s wrong.”
http://www.telegraph.co.uk/news/2016/12/08/boris-johnson-theresa-may-odds-pm-rebukes-foreign-secretary/
“Row over Saudi Arabia comments blows open rift between Theresa May and Boris Johnson.”
So what’s going on here?
Johnson accuses KSA that they are engaging in proxy-wars.
What does he mean?
He means that KSA is supporting IS.
The beauty of course is that in 2011, when the Syrian disaster was unleashed, the entire f* West was with KSA backing IS. So why this change of heart?
Because some of the Western Clouseau’s…
https://www.youtube.com/watch?v=SXn2QVipK2o
… like Johnson begin to see that they unleashed a geopolitical disaster, with the Western knuckleheads on the receiving end, namely losing control over the entire Middle-East, as a consequence of unleashing fundamentalist Sunny Islam.
And just like the West lost control over Iran after the Shi’ite fundamentalist revolution, the same scenario is now unfolding within subsidiaries like Turkey and KSA, who are teaming up to kick the Western imperialist out, this time for good, by using IS as an icebreaker to break the Shi’ite corridor and physically connecting Turkey with KSA. Won’t be long until Egypt joins the party as well.
#OttomanEmpire2.0
Boat on Fri, 9th Dec 2016 10:13 am
Greggiet,
Lol, what do you mean. It was just new news. You don’t think 34 billion will get the job done?