Essays on Global Oil Producing Firms Analysis Case Study

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The paper "Global Oil Producing Firms Analysis" is a wonderful example of a case study on macro and microeconomics. In recent times, crude oil is one of the most sought commodities in the world. The oil industry emerges as a powerful branch as far as the world economy is concerned. The yearly production of oil exceeds 4 billion metric tons globally. Ironically, out of the total production, one-third of the production capacity emanates from the Middle Eastern region. The world top producers of oil include Saudi Arabia, United States, Russia, Iran, China, and the OPEC countries(Bishop and Kelley 2015). Market Dominance There has been a rising demand and consumption of oil over the previous decades.

The United States proves to be the leading oil consumer. Other world’ s oil consumers include Japan, India, Russia, and Saudi Arabia, Germany, Canada, Brazil, South Korea, and France. Global Oil Producing Firms It is interesting to note that six companies within the oil industry feature in the top ten list of the best performing firms in the world. This is in terms of revenue. Examples of such oil firms include ExxonMobil, Shell, and Royal Dutch Shell.

Shell emerged as the seven largest firms globally in terms of revenue generation in the year 2015. Still, in the same year, ExxonMobil recorded a staggering 260 billion dollars in revenue. The company featured in the eighth position globally. It is important to note that ExxonMobil commands the biggest market value within the oil industry. In the year 2015, the company had the second-highest market value globally(Acemoglu, Finkelstein, and Notowidigdo, 2013). Consumer Markets The United States The consumption level of the United States accounts for one-fifth of the total consumption in the world.

The economy consumed more than 18 million barrels in the year 2012 whilst the year 2005 recorded the highest consumption level which registered 20 million barrels per day. Despite the fact that the US is among the leading importer of oil, it has been experiencing a decline in consumption levels. China China is the second-largest consumer of oil. In the year 2012, 11 percent of the world’ s consumption capacity happened in China. China is emerging as a global leader in industrialization making it have a key position within the oil industry.

Unlike the US, the oil consumption curve in China has been taking an upward trend(Le and Chang 2015). Japan Japan has won the attention of the world by performing extremely well in the automobile industry. This has made the country emerge as the third oil-consuming country in the world. In the year 2012, 5 percent of what the world consumed occurred in Japan. The country has been experiencing fluctuations in consumption over the years. India India is among the most vibrant developing nations in the world. The fact that the country has a high population makes it largely dependent on the transport industry.

This makes the country have a colossal consuming power for oil as experienced in the last two decades. In the year 2012, India consumed 3.5 million barrels a day(Le and Chang 2015). Russia and Saudi Arabia One-third of the world’ s oil is produced in the Middle East. A sizeable amount of this oil is consumed by Saudi Arabia which falls in the region. Russia which falls in Asia and the European regions is also the biggest consumer(Griffin and Teece 2016).

While combined, both countries recorded 6.7 percent of the world’ s total consumption. There has been a steady increase in oil consumption in the two countries over the years. Macroeconomics – United States GDP (Per Capita) In the year 2012, the United States GDP per capita stood at 51, 495 US dollars while 2014 recorded GDP per capita of 60, 340 dollars, representing 114 percent of overall GDP. This is a representation of the value of goods and services that the country produced divided by the total population. Inflation The inflation in the US averaged 1.47 percent in the year 2013 reaching a high point of 1.62 percent the following year.

The year 2015 recorded the best rates of zero figures while a hike in inflation was experienced in the country in 2016. External Debt The country leads to external debts globally. In the year 2014, external debt stood at 19, 643 billion dollars. Macroeconomics – China GDP (Gross Domestic Product) The Gross Domestic Product of China stood at 9.24 trillion dollars in 2013. Unemployment The rate of unemployment in the country assumed a downward trend from 2010 to 2016. The projected rates of unemployment are at a flat rate of 4.05 percent. Inflation Despite the high consumption rate of oil, the country has experienced a downward trend in her inflation from the year 2012 to 2015. Debts in China The debts in China has assumed an upward curve over the years.

While comparing the level of debt with GDP, it is certain that the country’ s GDP is not able to break it. This means that the trend is not healthy for the Chinese economy(Oberndorfer 2014). Macroeconomics – Japan GDP (Gross Domestic Product) In the year 2013, the GDP for Japan stood at 4.92 trillion dollars while GDP per capita recorded 38, 633 US dollars. Population Japan is among the most populated countries in the world.

In 2013, the country had 123.7 million people. Gross National Income High levels of income were realized in the country with the economy recording 4.8 trillion (purchasing power parity) dollars in 2013. Macroeconomics – India GDP (Gross Domestic Product) In 2013, India’ s GDP stood at 1.8 trillion dollars with GDP per capita of 1,503 dollars. Annual Growth Rate The country had an average growth rate of 4.7 percent in 2012. Population The country is one of the most populated in the world.

In 2012, India had 1.23 billion people. Inflation The country has been having a downward trend in the inflation rate from 2012 to 2015 with highs noted in 2013. Macroeconomics – Russia GDP (Gross Domestic Product) GDP per capita stood at 14, 611 in 2013 with GDP recording 2 trillion US dollars. Population The overall number of people in Russia stood at 143.5 million with a life expectancy of 70 years. Macroeconomics – Saudi Arabia GDP (Gross Domestic Product) Overall GDP recorded in Saudi Arabia stood at 748 US dollars with GDP per capita of 25, 961 dollars in 2013. Population The number of people in 2013 stood at 28 million in the same year. Gross National Income A high level of income amounting to 1.5 trillion dollars was recorded in 2013. Inflation The country has been having a downward trend in inflation with low levels of inflation recorded in 2015.

However, high levels of 4.02 percent were recorded in 2016 and the country projects heightened levels to be realized in 2018(Ftiti Guesmi and Teulon 2014).    

References

Acemoglu, D., Finkelstein, A. and Notowidigdo, M.J., 2013. Income and health spending: Evidence from oil price shocks. Review of Economics and Statistics, 95(4), pp.1079-1095.

Bishop, R.S. and Kelley, W.L., 2015. World Oil Supply in Transition.

Griffin, J.M. and Teece, D.J., 2016. OPEC behaviour and world oil prices. Routledge.

Le, T.H. and Chang, Y., 2015. Effects of oil price shocks on the stock market performance: Do nature of shocks and economies matter?. Energy Economics, 51, pp.261-274.

Oberndorfer, U., 2014. Oil Prices, Volatility, and Shocks: A Survey. In The Interrelationship Between Financial and Energy Markets (pp. 57-70). Springer Berlin Heidelberg.

Ftiti, Z., Guesmi, K. and Teulon, F., 2014. Oil shocks and Economic Growth in OPEC countries (No. 2014-064).

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