The oil industry has a history spanning over 5,000 years. Major events include the first structured oil well being built in the Gulf of Mexico and oil crises in the 1970s causing price fluctuations. Currently, world oil consumption is around 85 million barrels per day with the top producers being Middle Eastern countries. Factors like OPEC decisions, geopolitical conflicts, and economic conditions influence global oil prices. While oil remains crucial as a non-renewable resource, peak oil production may be reached by 2030, highlighting the need for alternatives.

1. OIL: HISTORY AND OUTLOOK

3. First structured oil well was built in the Gulf of Mexico

5. Major crude oil producing countries include Saudi- Arab, Venezuela, Iran, Iraq, Russia, etc

6. World Faced Its First Oil Crisis 1970 and 1980 The world Faced Its First Oil Crisis. Prices rose from Us $ 4 – US $ 40 in 1980’s

7. During the world war I between 1914-1918 demand for oil increased tremendously for functioning of tank, ships and planes

9. RESERVES-TO-PRODUCTION RATIO(RPR R/P) Reserves-to-production ratio (RPR or R/P) is the remaining amount of a non-renewable resource, expressed in years RPR = (amount of known resource) / (amount used per year) Unit : Trillions Of Barrels Annual Usage (2005) : 1.2-2 RPR (years) : 0.03 (40-80)

10. OIL SUPPLY/PRODUCTION

14. Major oil producers characterized by corruption, crime, political turmoil or arebeyond their peak

15. US- 208,000,000 (barrels/day) OIL DEMAND/CONSUMPTION Japan- 5,353,000 (barrels/day) China- 6,930,000 (barrels/day) Russia- 2,916,000 (barrels/day) Germany- 2,618,000 (barrels/day) India- 2,438,000 (barrels/day) Canada- 2,290,000 (barrels/day) South Korea- 2,130,000 (barrels/day) Brazil- 2,100,000 (barrels/day) Mexico- 2,078,000 (barrels/day)

17. Growing oil demand in developing economies owing to the rise in industries

19. OIL PRICE Crude oil prices behave much as any other commodity with wide price swings in times of shortage or oversupply Energy Information Administration (EIA): crude oil prices began surging since January 2008 and reached a record high (US$145 per barrel in July) The deepening of the financial crisis led to a steady decline in the price of crude oil (US$30-US$40) Prices started recovering in February 2009 OPEC’s decisions also has a significant impact on oil prices Less production of oil also made an increase in oil prices

21. The value of the US Dollar

22. OPEC

24. Oil prices and the expectations * IN USD ($) * IN USD ($)

25. MARGINAL COST OF OIL PRODUCTION Marginal Cost Of Oil Production is the point below which it becomes uneconomic to bring new oil projects to market Goldman Sachs (September 2008): Pegs the marginal cost of production for the oil industry at US$80-85 per barrel (/bbl) Also pointed out, forecasting, the number is likely to be $85-90 per barrel (/bbl)

26. “Good oil demand, reliable supply, beautiful prices, we are very happy,” Saudi Arabian Oil Minister Ali al-Niami “WHAT IF??” OIL PRICES RISE??? “ What if ??” oil prices rise ???? Click to view Video

27. EFFECT NEGATIVE IMPACT POSITIVE IMPACT

28. WHY THEY WILL RISE ?? The weakness in the USD is likely to keep Oil prices firm over the next 12 months, despite weakening of Key economies Confidence of the businesses all over the world (Industrial Consumption) Presence of a cartel – OPEC The shift in the strategy of inventory management Emergence and Growing Importance of futures market in setting oil prices (Speculation) Growth in Consumer Consumption High RP Ratio (approx. 41 years)

29. FUTURE OF OIL

31. As no fall in demand- Major Crisis to witness.

33. THANK YOU… BY: ANKITA DEWAN KARAN MEHTA MAHIMA SONI PURBSHA SHARMA RISHABH KHANNA SAHIL TREHAN