In Part 1, I introduced my abbreviations, data bases and analysis methods, and in Part 2, I presented the global trends. Part 3 presented the inter-regional trade movements to and from North America .
Some comments I have received in response to the previous parts suggests that some people are having trouble comprehending what I am trying to do in this series. So, I will go over some introductory material again and better explain some of the finer points of this analysis.
My main focus here is looking at the movements of petroleum between nine major global regions:
1) North America (NA)
2) South America (SA)
3) Europe (EU)
4) former Soviet Union (FS)
5) Middle East (ME)
6) Africa (AF)
7) China
8) Japan (JP)
9) Asia-Pacific remainder (APr)
I selected these regions because the yearly BP’s “Statistical Review of World Energy” (“BP review”), has either directly presented the inter-area movements between these regions, or, I can derive inter-regional movements between these regions from this data.
This type of data has been reported in the BP review every year since 2000, but to the best of my knowledge, no one has ever tried to look at and publically report an analysis of the trends in these data over time. The BP review and the EIA also report yearly total, crude and product imports and exports, and I also looked at these data.
Note that I am looking at the trade movements of petroleum, i.e., inter-regional imports and exports, between these regions. Therefore, for example, if I am talking about North American inter-regional imports and exports, then I am not talking about movements between countries within that region.
The imports and exports of petroleum between the USA and Canada , USA and Mexico or Mexico and Canada , are all what I have called intra-regional trade movements within North America . It is the imports and exports of any of these three countries within the North American region, to or from any other country in any of the other eight regions is what I call an inter-regional trade movement.
With the exception of North America (NA), the BP review doesn’t provide enough data to specifically account for the intra-regional trade movements. For instance, to assess this for Europe (EU) one would have to have all the exports and imports of petroleum between all of the countries within EU. The same would be the case for AF, SA, FS, APr, and ME. As explained in Part 1, I can get an indirect estimate of intra-regional trade movements by looking at the difference between gross import and export numbers reported by the EIA and the inter-regional numbers from the BP reviews. However, as further explained in Part 3, when I applied this to NA the intra-regional import and exports didn’t agree particularly well with the intra-regional imports and exports reported in the BP review data. This suggests that this difference method can only provide a very rough estimate of intra-regional trade movements.
Note that even though each of the nine regions are either net importers or net exporters of petroleum, each one of these regions still likely have both inter-regional imports and exports. For example, even though North America (NA) is a strong net importer, it still exports petroleum. Just because NA’s inter-regional exports are trending upwards and imports are trend downwards, doesn’t mean that it has become a net exporter, although if this trend continued long enough, and there was still petroleum production, then NA could become a net exporter. That is a story for another series. Likewise, even though South America (SA) is a net exporter, it still also imports a significant amount of the petroleum it consumes. South America presently exports more petroleum than it imports, but if there were a trend in the direction of less exports and increasing imports then I think you can see that SA could become a net importer.
To be more nuanced, the BP trade movement data, and further derivation of regional data from the present study, allows me to examine the specific relationship of petroleum trade movements between each of these nine regions. For example, it could be that SA is or becomes a net importer of petroleum with respect to Africa, or maybe some day North America, while at the same time being a net exporter of petroleum to China
Note that this study does not directly assess the total size of the global or regional petroleum export/import pools going forward. I have already did that kind of study in the past, based on an Export Land Model using a nonlinear least squares analysis of the Hubbert Equation of the petroleum production and consumption data elsewhere reported in the BP review (see http://crash-watcher.blogspot.com/2011/04/estimating-end-of-global-petroleum.html and subsequent parts).
I think that the present series is interesting in its own right, because as I said, I haven’t seen anyone, publically at least, look at the trends of these trade movement and analyze their implications. However, in the future, I would like to I add the results of the present study to an expanded version of my previous Export Land Model analysis. But again, that is a series for another day.
Well, with this further review and explanation out of the way, let’s get on with the results for South America .
South American Gross and Inter-regional Export and Import Trends
Figure 1 presents SA’s total petroleum consumption (i.e., both domestic and imported), and, the gross and inter-regional imports of total petroleum, crude oil and petroleum products, all from the data reported by the EIA or BP.
As you can see in the figure, the BP and EIA total consumption numbers (red circles and squares at the top) while slightly differing in value, both illustrate the long-term trend of increasing petroleum consumption in SA since at least 1985. After a plateau from 1999-2003, petroleum consumption has taken off and was about 2.2-2.3 bby in 2010.
Total gross petroleum imports (open red circles) has been steadily rising since 1986, the first EIA reporting year. In 2008, the last EIA reporting year, gross petroleum imports of 1.3 bby provided for about 60% of total consumption. The total inter-regional petroleum imports (open red squares) were much lower ranging from 0.4 to 0.6 bby from 2000 to 2010. That is about 27% of total consumption in 2010, implying that there is a relative larger amount of intra-regional trade movements of petroleum in SA (about 0.8 bby, from Figure 5 below). I suspect that the intra-regional trade movements of petroleum would largely involve exports from Brazil or Venezuela to other countries in SA, which by the way, includes Central America .
SA’s gross crude imports (open brown circles) have slowly, but steadily increased from 0.56 to 0.7 bby from 1986 to 2008, but, the inter-regional imports (open brown squares) have been declining from 0.3 to 0.15 bby from 2000 to 2010. This would suggest a trend of increased refining of crude oil within SA.
SA’s gross (open green circles) and inter-regional petroleum product imports (open green squares) are both increasing quite dramatically: gross petroleum product imports increased from 0.18 to 0.6 bby from 1986 to 2008, while inter-regional petroleum product imports increased from 0.08 to 0.43 bby from 2000 to 2010. Again the difference between gross and inter-region product imports implies that there are substantially amounts of intra-regional petroleum product imports (see Figure 6 below).
Figure 2 presents SA’s total petroleum production (i.e. domestic production, blue circles and squares for EIA and BP data, respectively), crude oil production (purple circles), and the gross and inter-regional total petroleum, crude and petroleum products exports.
I kept the vertical scales of Figures 1 and 2 the same as each other to better illustrate that SA is a net exporter of petroleum. Figure 2 illustrates that until about 1998 a large fraction of SA’s production was crude oil (purple circles). Thereafter, crude production rate has flattened out, even though total petroleum production continues to increase, with a prominent dip in 2001-2003.
SA's total gross petroleum exports (open blue circles) have oscillated with increasing amplitude since the late 1990s, but the recent trend is a peak in 2006 at 2.2 bby and down trend in 2007-2008. The inter-regional total petroleum exports (open blue squares) have not oscillated as widely, and the decade long trend is up, but for last 5 years, inter-regional total exports are flat at about 1.3-1.4 bby.
The gross total petroleum export rate oscillates because both gross crude and petroleum product export rates have oscillated. For instance, gross crude oil exports (brown open circles) peaked once in 1998 and then again in 2005. In comparison, the inter-regional crude oil exports (brow open squares) is much more steadily increasing, except for a dip in 2003. For instance, gross petroleum product exports (green open circles) peaked in 2001 and again in 2006, with a down trend since then. The inter-regional petroleum product exports also appears to have peaked in 2006.
In part 2 (Figures 2 and 3), I showed that the total global import and export pools of petroleum showed signs of plateauing and peaking around 2006-07, and so it is interesting for me to look at regional trends relative to these flat to diminishing global import and export pools. Note that the gross and inter-regional petroleum import/export pools are not the same size. For example, from Figure 2 in Part 2, in 2008, the total gross global petroleum import pool was 22.6 bby, while the total global inter-regional petroleum import pool was 17.1 bby.
Figure 3 shows SA's imports relative to the respective total gross and inter-regional global petroleum import pools.
The gross and inter-regional crude oil imports as a percentage of the global import pool are both strongly trending downwards while petroleum product imports are strongly trending upwards.
The sum of these two opposite trends adds up to the gross total petroleum imports, as a percentage of the global import pool, being about 6 %, and slightly trending downwards, while the total inter-regional petroleum imports, being about 3% of the total global pool, is trending upwards. Basically, the downward trend in gross crude oil imports is stronger than the upward trend in gross petroleum product imports, but the upward trend inter-regional product imports is stronger than the inter-regional downward trend in inter-regional crude oil imports.
These details are somewhat confusing I know, so keep in mind the broad picture that both the EIA’s gross import data and the BP’s inter-regional import data, suggest less importation of crude oil and more importation of petroleum products. And, that SA is a relatively small drawer, 3%, of the global import pool.
Figure 4 shows SA's exports relative to the respective total gross and inter-regional global petroleum export pools, which, of course, is about the same as the global import pool. Also analogous to the imports trends shown in Figure 3, these relative export amounts are expressed as a percentage of the total gross export pool and the total inter-regional export pool, and, these total pool sizes are different: e.g., 23 bby of gross exports in 2008 versus 17.1 bby inter-regional exports in 2008.
I kept the same vertical scale as used in Figure 3 to make the point clear that SA’s petroleum exports greater than its imports—that is a net exporter.
SA’s gross total petroleum exports (blue open circles), as a percentage of the total gross petroleum export pool (blue circles), appears to have lots of oscillation: an absolute peak in 1997 at 9.8 %, dropping to 8.1% in 2004, then back up to 9.2%, before dropped back down to 8.2% in 2008, the last reporting year for the EIA.
The absolute peak in 1997 is largely due to an absolute peak in gross crude exports (brown open circles) in 1997-98. A peak in gross petroleum product exports (green open circles) helped to slow the decline in total gross exports, as did another spike in crude oil exports in 2005.
The inter-regional petroleum export trend is calmer. Total interregional petroleum exports (open blue squares) have ranged from 7-8 percent of the total global petroleum export pool. Interregional exports of crude oil (open brown squares) dipped to a low of 4.7% of the total export pool in 2003 and has steadily increase since ten to 5.8% in 2010. Inter-regional petroleum product exports (open green squares) peaked in 2004, at 3% and has steadily declined since then to 2% in 2010.
South American Intra-regional Export and Import Trends
The difference between the gross and inter-regional imports or exports, shown in Figures 1 and 2, respectively, should correspond to intra-regional movements of petroleum. For the reasons presented in Part 3, I think that these differences are only rough estimates of intra-regional imports and exports. But still, I will show the differences here, with some brief commentary.
Figure 5 shows the differences between the gross and inter-regional total, crude oils and petroleum product imports, which should equal the intra-regional values for these quantities.
Crude oil intra-regional imports (brown triangles) have increased, while product imports (green triangles) have declined, resulting in a pretty flat trend in total intra-regional petroleum exports (red triangles) at about 0.8 bby.
Figure 6 shows the differences between the gross and inter-regional total, crude oil and petroleum product exports, which should equal the intra-regional export values for these quantities.
Crude oil intra-regional exports spiked in 2005 and intra-regional petroleum product exports have steadily declined, leading to a total intra-regional petroleum export trend with a spike in 2005 and overall downward trend to 0.56 bby by 2010.
Trade movements of total petroleum between Sorth America
Figure 7 show the specific quantities, in bby, of petroleum imported to SA FROM each of the eight other regions. For reference, Figure 7 also shows the sum of SA's total inter-regional petroleum imports from all eight of the other regions (black "Xs"), which is the same as presented in Figure 1 (red open squares).
SA's total inter-regional petroleum imports were quite steady at 0.4 bby from 2000 to 2005 and then started to increase. This appears to be mainly due to an increase in imports from NA and AF (especially the spike from AF in 2005) and to a lesser extent from EU and APr.
At the same time, imports from the ME and FS have fallen. In 2000 ME was the top import source, in 2010 NA is the top source with AF in second, and APr in third; ME is tied with EU in fourth or fifth place and FS is essentially at 0 (i.e., 0.005 bby).
Figure 8 shows petroleum export from SA TO each of the eight other regions and again for reference, I show SA’s total exports (black “Xs” corresponding to the blue squares in Figure 2). Note the larger vertical scale compared to Figure 7, illustrating SA’s position as a net exporter.
Figure 8 illustrates the upward trend in SA’s petroleum exports, and that NA is by far the major export destination for SA’s petroleum. However, after peaking at 1.1 bby to NA in 2005, exports to NA have since declined to 0.85 bby. This quantity is still about 3 times more than the 0.29 bby of petroleum that NA sends to SA (Figure 7), so SA is still a net petroleum exporter with respect to NA.
EU has also been a substantial destination for SA’s petroleum exports at about 0.1 bby, but, recently CH and APr risen to replace EU as the number two and three destinations.
Figures 9 and 10 present the same data as shown in Figures 7 and 8, respectively, but expressing SA's petroleum imports or exports, to or from each of the eight regions, as percentages of the total global inter-regional petroleum import/export pool (of course, on a global scale inter-regional imports and exports are the same) . For reference, I also show SA petroleum imports and exports as percentages of the global petroleum import/export pool (“Xs” right vertical axis; note the different scale).
Additionally, I have taken all of these data and made linear extrapolations of the 2000 to 2010 data (via linear regression analysis) out to 2021.
Indeed, the linear regression trends suggest that imports from ME and FS are pretty well ending, and going forward, SA will look to NA, AF, APr and EU in that order for its imports.
Likewise, Figure 10 nicely shows the export trend discussed in the context of Figure 8: declining exports from SA to NA, increasing exports from SA to CH and APr, and a slight uptrend in exports to EU. SA’s total petroleum exports have been fairly stable at 8% of the total export pool.
The linear regression trends suggest that CH is about to overtake EU as the number two export destination of SA’s petroleum, and that APr would overtake EU after 2021. Comparing Figures 9 and 10, if the linear extrapolations are accurately predictive, then NA would become a net exporter to SA in about 2021.
Finally, Figures 11 and 12 show the relative changes in SA's import sources and export destinations, respectively, as a percentage of SA's total exports or imports in the years 2000 and 2010, and, as predicted in 2021, from the linear regression trend lines.
Figure 11 illustrates the trends for increased imports from NA, AF, APr, EU, and even CH which is made almost the same relative contribution (6.2%) to SA’s imports as EU’s (6.3%) and CH is predicted to make a larger contribution than EU by 2021.
NA’s growing role as an import source to SA is also quite clear in Figure 11. SA looked to NA for 30% of its petroleum imports in 2000, and 50% in 2010, and the linear regression trend line predicts 62% in 2021.
Also prominent in Figure 11 is the disappearance of ME and FS as petroleum import sources. From 38% and 15%, respectively, of SA’s imports in 2000, to 7 and 1% respectively, in 2010, and a prediction of zero well before 2021. ME and FS went from SA’s number one and number three import sources in 2000 (NA was number two) to relatively minor players in 2010, and likely non-players in the years to come.
Figure 12 illustrates how SA’s petroleum export sources have diversified since 2000, and how this trend will likely continue in the future.
In 2000, overwhelmingly, SA’s exports went to NA (88%) and EU (8%). But, by 2010, exports to NA was down to 66%. EU as a destination for SA exports increased slightly, to 9% by 2010. However, by 2010, CH was receiving 14% and APr was receiving 11% of SA’s exports. By 2021, exports to NA are predicted to be down to 39%, with CH, APr and EU receiving 26%, 16% and 17% of SA’s exports, respectively.
Summary and Conclusions
For the last decade, South America ’s exports of 1.1 to 1.3 bby of petroleum (Figure 2), accounted for about 7-8 percent of the global petroleum export pool (Figure 4). Over the same period, however, South America has been increasingly importing petroleum from other regions of the world. From 2000 to 2010, South America ’s petroleum imports increased from 0.4 bby to 0.6 bby, a fifty percent increase (Figure 1). Imports of crude oil are trending downward while imports of petroleum products are trending upwards (Figure 3).
In the past decade, North America and Africa, as petroleum import sources to South America, have increased, while the Middle East and Former Soviet Union as import sources have gone down substantially (Figure 9). Over the same period, North America as petroleum export destination for South America petroleum has gone down, while China, other Asia Pacific countries (except Japan), and Europe have gone up (Figure 10). If these trends were to continue, South America may one day become a net importer of petroleum from North America and a strong exporter to China and the other Asia Pacific countries (Figures 11 and 12). From a South American perspective, these trends might be seen as a desirable diversification of South American petroleum export destinations. From a North American perspective, this trend might be viewed as a redistribution of South America’s petroleum wealth away from North America, and towards China
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Next time I will cross the Atlantic and examine Africa 's petroleum Export and Import Trends.
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