Growing Global Demand for Oil and Its Economic Impact

Dean Foreman, Chief Economist, Texas Oil & Gas Association joined Grayson Brulte on The Road to Autonomy podcast to discuss the growing global demand for oil and its economic impact.

The conversation begins with Dean discussing the current state of the oil markets.

It’s a tight market and despite everything that has been going on we really have tightness to watch in terms of supply and demand and where that supply is going to come to meet that demand.

– Dean Foreman

The growing demand for oil in the United States is coming from jet fuel, 1.8 million barrels per day and diesel fuel, 3.6 million barrels per day. With an additional 6 million barrels per day being refined for materials. With the growing demand for oil the United States is looking to increase volume by lifting sanctions on Venezuela. The demand for oil is not just limited to the United States, it’s a global phenomenon.

China is now the single largest importer of crude oil, over 13 million barrels per day.

– Dean Foreman

With China being the single largest importer of crude oil, the country embraced electric vehicles to slow their dependence on foreign oil imports.

A big part of the traditional push by China to get into electrification wasn’t just to strategically control the value chain, it was to prevent, as their economy grew an unsustainable growth in their oil imports.

– Dean Foreman

U.S. Energy Information Administration is projecting demand of 103 million barrels per day in 2024, an increase of roughly 200,000 barrels per day year-over-year. Over the coming years, the United States will be the single largest source of growth of oil supply.

We’ve seen record production this year, U.S. crude oil production for the first week of October struck 13.2 million barrels per day, that’s a record high. Our previous high was in March 2020 of 13.1 [million].

– Dean Foreman

The growing demand for oil is good for the Texas economy. Texas, as of September is producing 5.9 million barrels of crude oil per day. For the first eight months of 2023, Texas has driven 43.2% of U.S. oil production, its highest since 1981. For the first seven months of 2023, Texas has exported $125 billion of oil, natural gas and derived products globally.

Wrapping up the conversation, Dean shares his outlook on the oil markets for the next quarter.