Commodity Essay Example | Topics and Well Written Essays - 750 words

Commodity - Essay ExampleThe most important crude producing state in the complete world is Saudi Arabia. It is the biggest anele producing country of the world. In the division 2011, it has supplied 12.8% of planetary oil (Chakarova, 3). The country has got a oil reserve of 266 billion barrels (Chakarova, 3). Not only Saudi Arabia further Iran is also becoming a world leader in the crude oil supply. Iran is in a state of rapid development because of its oil reserves. Strait of Hormuz, through which 20% of world oil is supplied, is nether the control of Iran. If this passage is blocked, then it would be a great problem for the whole world. As a take of which the oil prices will definitely rise. This would also require new path of delivery of oil to other countries. However, there atomic enactment 18 other countries in the middle-east which has substantial capacity of oil production. But, there are dates at the moment between those countries in the middle-east. This is a sca ry sign for the world because any conflict between these countries would result in immense losses which the other remaining nations of the world would have to suffer. aim of Oil in world(prenominal) mart There is huge want of oil in the whole world. In this modern era of rapid industrial enterprise, it is very hard to intend of running any patience without oil. However, the supply is very less as compared to the huge demand all over the world. Each year this demand is growing leaps and bounds but it is a very critical issue now to think of where from this demand be met. In the year 2004, the OECD countries consumed 48.8 mmbpd and it was 5.2% more than in the year 2003 (Cordsman and Al-Rodhan, 31). This is just a number showing the horrific nature of demand in crude oil in the world social club years ago. But the situation today is even more horrifying. It has also been seen that due to the huge industrialization process in the upcoming economies like India and China, the de mand has risen even more in the other(prenominal) few years. The rapid development process in these two Asian countries would surely increase the demand as they themselves do not have any natural source of oil. All they can do is that they can import the crude oil from the middle-east countries. A graphical data is presented below showing the demand of oil based on economic growth from 2001-2025 (million barrels per day) (Cordsman and Al-Rodhan, 34). 2001 2002 2010 2015 2020 2025 LG 78 78.20 98.60 110.00 120.60 132.30 R 78 78.20 93.60 103.20 111.00 119.20 HG 78 78.20 91.10 97.20 102.30 107.70 (Source Cordsman and Al-Rodhan, 34) Note LG-low-growth, R- reference case, HG- high growth case. Price of oil in international market Due to the low supply, the demand for the crude oil has increased a lot in the other(prenominal) few years which in turn has raised the price of crude oil in the global market considerably. The developing economies of the world like India, China, etc., they are on the verge of development. As a result they are in huge demand of crude oil for their rapid industrial growth. They need huge supply of crude oil which has made the price of oil go high in the international market. And its not only the price of crude oil, but the different levels of duties, processing cost, all these impart up to a level which makes it a nightmare for the consumers in this era. The prices of petrol, diesel, LPG going high on a daily basis are the consequences of this. Here is a list showing the annual