Impact of growing Asian markets on the world oil industry

The focus of world petroleum activity has largely shifted from the industrialized OPEC nations to the rapidly developing countries of Asia where new refinery ventures, marketing operations, and trading offices have proliferated. Asia consumed 22% of the world's petroleum in 1985, but rapid growth in the past decade has raised its share to over 30%. Demand in Asia has grown by an average of 550,000 B/D each year since 1985, accounting for 80% of the world's total growth in demand. The robust demand growth envisioned for the 1990s cannot last indefinitely. The key factor restricting growth will be the world's capacity to produce crude oil, which they believe will begin to approach sustainable limits after 2000. When those limits are reached, another oil price shock is likely, and another cycle of conservation and substitution will begin. If growth were to continue at the high rates of the 1990s, crude availability limits would be reached early in the next century. In this paper, they have presented a soft landing path for demand, production, and pricing. They project a gradual slowdown in demand growth, in response to a gradual increase in real crude oil prices. In the real world, a much rougher path is likely, even though both paths start and end at the same point