What is evident in the data is that the composition of global oil demand is rapidly changing. Mature economies in the US, Europe and Japan still account for over half of global consumption, but their share is declining. The share of oil consumption in advanced countries has declined from 62.2% in 1980 to 49.9% in 2010. What is happening is that most of the growth in the demand for oil is coming from emerging/developing countries.
Due to a combination of rapid economic growth and an expanding manufacturing and transport sector, emerging economies are quickly cornering a larger pie of global oil consumption. Growth in manufacturing and vehicle ownership is the most important driver of oil demand in these countries. It is not surprising that the booming emerging economies have posted robust oil demand.
This is especially true of China and India, with their GDPs growing at an annual rate of around 10% and 8%, respectively, over the past 5 years, with no reasonable expectation of a slowdown. From the historic oil consumption data provided in Tables 2 and 3, following observations are made:
• As is shown in Chart 1, oil price rose significantly in the decade of 1970s. Oil consumption responded to these price hikes with a lag as there was virtually no growth in global oil demand between 1980 and 1990. Oil demand rose from 64.8 mbd in 1980 to only 67.0 mbd in 1990. Demand in mature economies declined by 400,000 mbd over this 10 year period.