Based on the OPEC website (n. p.) the countries with the lowest industry margins, which indicates the profitability for companies involved in retail oil sales are countries of the G7, which have on average lower industry margins as the countries in the OECD. In comparison the average industry margins are lower in the countries of the United Kingdom, Italy, Germany, France, Japan, Canada and United State of America, but also among those there are differences. In Italy, Germany and France the net margins are the highest and in the United Kingdom, France and Canada the lowest.
The high and low prices for a liter of oil have an impact on the consumer behavior
and investment in renewables. The higher prices of oil in the UK, Germany and Italy result in more investment in the renewables in comparison to the USA and Canada, where prices of oil are lower, which results in the renewable energy being more affordable when compared to the oil prices. The consumers also think of alternatives of mobility, such as public transport, which positively impacts the environment. The consumers in America can more easily afford the oil as the population in the Europe and they can spend more money on other things.
The overall price of oil is determined by the supply and demand. The dramatically fall of prices in 2008 and 2009 are a result of the global economic crisis, where the demand had decreased and the supply did not manage to adjust on the short term. Further on, the gradual rise in OPEC oil prices up to 2012 can be explained by the heightened price volatility as the result of the geopolitical tensions and increased levels of speculation in the markets along with the supply and demand indicators. The economic recovery from the great recession saw an increase in the demand for oil (OPEC, n. p.). Continuing with the year 2013, the decline of oil prices is the result of the OPEC strategy to defend the market share rather than price. The OPEC countries have been increasing the oil production and causing the prices to decrease in order to gain the market share in the expense of their competition (International Energy Agency, 16-17).
Monthly prices over the last year show a steady decline until January 2016, followed by a steady increase over the last 4 months can be explained with the fact that OPEC policy did not work out as expected. The low prices were damaging for the oil exporting countries since the majority gets the great proportion of their governmental revenue from the oil export and also because the non-OPEC oil exporters continued to export the crude and other oil related products.
Source: US Energy Information Administration, n. p. and World bank, n. p.
The largest petroleum producers are the United States, Saudi Arabia, Russia and China also marked with the red color in the column A (US Energy Information Administration, n. p.). It is obvious from the column B that Kuwait, Qatar, Saudi Arabia, United Arab Emirates, Algeria and Iran are most dependent on the fossil fuels for energy. Among those countries they are the biggest oil exporters and have one of the biggest crude and oil reserves globally. The gaps between these indicators can be explained in the fact of the level of development and also the level of oil reserves the country has. All of the countries except of the Kazakhstan are the OPEC countries, which have traditional high dependence on oil, since the oil has been the main revenue and the reserves were not newly discovered. In the fact of Iran, the reason is international isolation, where the country has been dependent on its own natural resources. The differences between those countries are also in the stage of development and time of the oil discovery along with the oil production techniques and different costs related to it. The countries in the column B have the lowest oil production costs (World Bank, n. p.).
Congo with 4.3%, Ethiopia with 5.6%, Mozambique with 9.2%, Zambia with 12.2%, and Tanzania with 14.4% were the countries that were in 2013 the least dependent on the fossil fuels for energy consumption, which can be found in the fact of their underdevelopment. From the countries examined the least dependent on fossil fuels for consumption were Nigeria, Angola, Brazil, Norway and Canada (World Bank, n. p.).
Work cited
International Energy Agency. Oil market Report. 2016. Web.
https://www.iea.org/media/omrreports/fullissues/2016-04-14.pdf
OPEC. Who Get What From a Litre of Oil in 2014? N. d. Web.
http://www.opec.org/opec_web/en/data_graphs/333.htm
OPEC. OPEC 161st Meeting Concludes. 2012. Web.
http://www.opec.org/opec_web/en/2313.htm
US Energy Information Administration. Total Petroleum and Other Liquids Production 2014.
2014. Web. http://www.eia.gov/beta/international/rankings/#?prodact=53-1&cy=2014
World Bank. Fossil Fuel Energy Consumption. 2014. Web.
http://data.worldbank.org/indicator/EG.USE.COMM.FO.ZS
