CRUDE OIL

$ Black Gold $

Made By :Jaskaran S. Kohli

Crude Oil is a naturally occurring thick , dark brown flammable liquid which is derived from Fossil Fuels.

Crude Oil is also referred as Black Gold as it of immense economic importance.

It is a non renewable resource ,thus its demand > supply leading to high price rise.

An international body called OPEC controls the pricing of oil all throughout the globe.

Oil prices have risen from $18.5 in 1976 to $150 in 2012.

INTRODUCTION

WHAT IS CRUDE OIL ? Petroleum or Crude Oil is a naturally occurring

thick , dark brown flammable liquid found in the Upper Strata of the Earth’s Crust.

It is recovered mostly through oil drilling and is then refined into a large number of consumer products, like petrol,kerosene,plastics andpharmaceuticals.

It is a type of Fossil Fuel consisting of a complex mixture of hydrocarbons.

Hydrocarbon

Crude Oil

• Before it can be used crude oil must be refined. • Hydrocarbons can be separated using distillation, which produces different fractions (or types) of oil and gas.

Jet fuel

Car fuel

Road tar

DistillationPlant

Oil refinery

Exploration and Production

WHY BLACK GOLD?

Petroleum products are extracted from Crude Oil, which is black in colour.

Availability is minimum but demand is more.

Its economic value is immense. Causes Inflation and affects the pricing of

almost everything.

Top Oil Producing Countries

# Nation 103bbl/d (2007)

103bbl/d (2008)

103bbl/d (2009)

Present Share

1 Saudi Arabia  10,234 10,782 9,760 11.8%

2 Russia  9,876 9,789 9,934 12.0%

3 United States  8,481 8,514 9,141 11.1%

4 Iran  4,043 4,174 4,177 5.1%

5 China 3,901 3,973 3,996 4.8%

Top Oil Consuming Countries

Nation (1000 bbl/day)

(1000 m3/day)

population in millions

bbl/year per capita

United States  19,497.95 3,099.9 314 22.6

China 7,831.00 1,245.0 1345 2.1

Japan  4,784.85 760.7 127 13.7

India  2,962.00 470.9 1198 0.9

Russia  2,916.00 463.6 140 7.6

SOARING PRICES

FACTORS AFFECTING PRICE RISE Changes in Supply & Demand. Global Equity Market. Movement in Dollar($). Organization of the Petroleum Exporting

Countries (OPEC) controls the price. Increase in Tax Rate. Wars , Recessions and Natural Calamities

are other important factors.

Supply & Demand determine the price of fuel. If Demand > Supply , prices will rise and vice-

versa. Global Consumption has grown by 1.2 Million

Barrels per day. Oil is a Non-Renewable resource, hence is limited.

SUPPLY & DEMAND

ROLE OF Organization of the Petroleum Exporting

Countries (OPEC) is an intergovernmental organization of twelve oil-producing countries .

It controls and regulates Global Price of crude oil. Its main objective is to peruse various ways and

measures to stabilize the price of oil in International Markets.

OPEC

Peak oil is the point in time when the maximum rate of petroleum extraction is reached, after which the rate of production is expected to enter terminal decline.

PEAK OIL

o In 1956, Hubbert predicted that global oil production would peak

around the Year 2000 and trigger an Energy Crisis with power blackouts and rising costs of energy and fuel .

Era ofenergycrisis

WHEN OIL PRICES RISE : Rise in Inflation Rates. Government spending on Subsidy Increases. GDP is affected negatively. Foreign Currency reserves reduce. Prices of almost everything increases, causing

extreme hardship towards the common man. Leads to wars, protests and political instability.

EFFECT ON US ECONOMY Overall consumption of gasoline is

down by 7%. 2.5% decline in USA GDP due to rising

oil prices. Prices hit a shocking $150 per barrel

leading to rapid inflation. A $10-a-barrel increase in the price of

oil reduces U.S. GDP growth by 0.5 percentage points.

PRICE IN INDIA

Prices of crude oil have risen by more than 33% in the past two months.

Indian Rupee has depreciated from Rs. 44 per dollar in April 2011 to Rs.49 now.

o Inflation also went up to 12.27% which was highest for India in 2 decades.

o India’s subsidy zoomed to 2.5%of GDP.

EFFECT ON INDIAN ECONOMY Rapid Inflation. Hike in Interest Rates. Slowdown in Economic Growth. Fall in Employment Opportunities. Reduced amount for infrastructure.

Inflation : went up to 12.27%. Fuel Subsidy Burden : of Rs. 1,42,203 Crores Rise in Cost of Imports : have risen by $1.2 Billion. Widening of Trade Deficit :for 2009-10 was $117.3

Billion. Estimated that a sustained 10 dollar increase in oil

prices lead to a 1.5 per cent reduction in the GDP.

Extinction of whales. Extraction of Oil leads to land degradation. Global Warming: petroleum releases carbon

dioxide, a greenhouse gas. Oil Spills: damages land, pollutes water and

kills marine animals. Tar balls: huge blob of oil causing

contamination and pollution.

ENVIRONMENT

Crude oil and refined fuel spills from tanker ship and damage natural ecosystems.

Can be on land or sea. Quantity of oil spilled during accidents has ranged

from a few hundred tons to several hundred thousand tons.

Oil Spills

EffectsLand Degradation.Pollutes sea water.Kills Marine life. Illnesses and Diseases.

ALTERNATIVES Alternatives to petroleum-based vehicle fuels:

Internal Combustion Engines

Natural Gas

Vehicles

Biodiesel Powered Vehicles

Hybrid Electric Vehicles

Solar Cars

Alternatives to burning petroleum:

Solar Powers

Wind Power

Hydro Electricit

y

Nuclear Energy

IN A NUTSHELL

2012

1997

Thank You

JaskaranSingh