The world’s emergency buffer of oil is rapidly depleting. Amid wars and supply disruptions, governments and companies have withdrawn more than 1 billion barrels of oil from their stocks, Reuters reports. The world now has less than 6 billion barrels of oil remaining as commercial inventories, and only 10 percent or less of that is available for immediate use.

This means that the market now has little room to absorb shocks. If a new supply crisis occurs, the oil market could prove highly vulnerable to its impact and upward pressure on prices is already mounting. Based on this news, let’s understand how much oil is used in the world every day. How much does the people of India spend and most importantly, what accounts for the total oil reserves.

Daily oil consumption in the world

Before understanding the emergency, it is important to know first that the report talks about emergency oil stocks. No total oil reserves. The world currently has enough oil reserves. According to the data, around 103 to 105 million ie 103 to 105 million barrels of oil are consumed daily across the world. If we calculate the average per person, it comes to about 0.53 US gallons per day or about 2.5 liters per person.

How much oil goes into what?

1. Diesel accounts for the largest share of this total consumption. According to EIA data, daily consumption of diesel and gasoil is about 28.7 to 29 million barrels, which is about 27 to 28 percent of total demand. It can be called the backbone of the global economy, as heavy machinery, long-haul trucks, cargo ships, farm tractors and public transport all run on it.
2. In second place is petrol i.e. motor gasoline. According to IEA data, its daily consumption is about 26.5 to 27 million barrels and accounts for about 25 percent. It is mainly used in private cars, motorcycles and light trucks. Petrol demand growth has slowed due to the introduction of electric vehicles in Western countries, but worldwide demand for petrol is still high. Diesel and petrol together account for about 74 percent of the clean energy used in transportation.
3. The third major segment is petrochemical feedstock, namely products such as ethane, LPG and naphtha. According to statista.com, their daily consumption is 14.5 to 16 million barrels, which is 14 to 15 percent of total demand. Plastics, synthetic fibers, packaging and industrial chemicals are made from it. The sector is currently the fastest growing source of global oil demand.
4. Jet fuel and kerosene are at number four. According to Energy Intelligence, its daily consumption is about 7.8 to 8 million barrels, or about 7.5 percent share. The aviation sector has fully returned to its pre-pandemic growth path and is the fuel that powers passenger planes and the air-cargo network.

The remaining approximately 25 million barrels per day come from products such as residual fuel oil, asphalt and lubricants, which power large ships, build roads and lubricate engines.

Which country spends how much oil

America is the world’s largest consumer by country, consuming about 20.3 to 20.6 million barrels of oil per day. China is in second place, consuming 16.2 to 16.4 million barrels per day. India ranks third with a daily consumption of 5.3 to 5.6 million barrels. If we talk in litres, about 92 crore liters of oil are used in India every day.

How much stock is left, how long will it last?

The question now is whether the world will run out of oil. According to Worldometers, the total proven reserves of crude oil in the world are around 1.57 to 1.76 trillion barrels, i.e. around 1,57,000 to 1,76,000 crore barrels. If the current pace of consumption continues, this stock may last for about 57 years.

The largest share of these reserves is held by Venezuela, where it has 30,300 million barrels of oil. However, the oil there is of high quality, so it is expensive to extract. In second place is Saudi Arabia, which has reserves of 26,700 million barrels and where oil extraction is considered the easiest and cheapest in the world. After this, Iran has 20,800 crore barrels of oil and Iraq has 14,500 crore barrels of oil.

How far has the discovery of new reserves reached?

Oil exploration is also ongoing. According to a report by S&P Global, more than 130 large conventional oil reserves are discovered each year worldwide. About 70 percent of these new resources have been discovered under the sea, i.e. in offshore areas. Latin America is at the forefront of innovation, with Brazil and Guyana in particular doing wonders.

Does India need to fear?

This situation can become a matter of concern for India. The concern is because India is the third largest consumer of oil in the world and imports a large portion of its requirement. When the global buffer is so reduced, any fresh shock could lead to a sharp rise in crude oil prices and have a direct impact on petrol-diesel prices, freight costs and inflation.

Overall, there is a need not to panic, but to be alert. The real danger is not oil shortages, but rising prices and supply disruptions. In such a scenario, it has become more important than ever for India to strengthen its strategic oil reserves, maintain ties with various countries for oil supply and focus on alternative energy.