Significance Of Crude Oil Supply And Its Impact On Oil Prices

Due to the increase in the oil consumed by the UnitedIn the year 2009, the United States of America was
States in the recent times, oil imports have increaseddependent on crude oil supply from countries such as
which is an indication that it is dependent on the gulfCanada, Saudi Arabia, Iraq, Nigeria, Mexico, Algeria,
countries for crude oil supply. With the expansion ofColombia, Brazil, Venezuela and Angola. The top crude
crude oil industry, the GDP growth rate has increasedoil supplier to the United States was Canada, which
in Russia, which is one of the global oil exporters. Thesupplied 1.94 million barrels per day. Following suit was
oil exporting countries will earn huge revenue based onMexico with a supply of 1.13 million barrels per day and
the growing oil demand with high oil prices. These1.09 million barrels per day from Saudi Arabia. Saudi
exporters will face a major crisis if the oil prices soarArabia being the world's biggest oil supplier will
up too high as the demand for oil as well as the pricesconcentrate on crude oil supply to India. In March 2010,
will decline thus reducing the GDP growth in the oilit pumped 8.2 million barrels per day and UAE's oil
consuming nations. Due to increase in domesticproduction recorded 20,000 barrels a day during the
consumption in oil exporting countries, exports maymonth of March.
decline. Disruption in crude oil supply can cause severeIn 2015, supply will be surpassed by demand due to
price inflation.recession. Crude oil is likely to peak in the coming
When new oil is discovered and introduced in theyears leading to maximum global extraction point. If
domestic as well as International markets, crude oilmaximum production level is reached then there will be
supply increases and there might be a reduction in oila decline in crude oil supply. New oil reserves are being
prices thus affecting the economic growth of the oilexplored to meet the growing demand of crude oil.
exporting countries. Demand for oil can reduce if the oilAdvanced and new production techniques are likely to
prices are high thus making alternative fuels morebe introduced. Non-OPEC members are turning into
competitive. OPEC assigns production quota to itsmajor oil exporting nations and they play a major role
member countries with an aim to create favorable oilin supplying oil to the United States, which is the world's
prices and to limit crude oil supply that is available in thebiggest oil consuming nation. It has been predicted that
global market. crude oil supply can be disrupted due towithin 15 years, the global crude oil supply will come
various factors such as political instability, technicalfrom unconventional resources such as heavy crude
reasons and terrorism.oil, oil shale and oil sands.