Money from crude oil

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What is the true price or cost of oil? What was the evolution of prices during the last decades? How much do oil to those who sell it? She has energy been more expensive? How much energy based on the purchasing power?

In this article and the following, we will attempt to answer these questions.

Preliminary remarks.

1) We mean by "true" price, the adjusted price of oil: not the price in current currency (which does not mean anything in the light of the evolution of the currencies) but the price in constant currency corrected by inflation .

2) A second correction will be made by bringing the price of oil to that of purchasing power. Thus, we will get what can be called a "fair price" or at least a "fairer price" since inflation is far from taking into account all aspects of consumption. See this article.

3) Like all other energies are more or less pegged to the price of oil, the analysis also, in some measure, other energies.

Introduction Data Sources.

We shall progressively by an analysis of the following developments and figures:

1) The price of a barrel. Source: World Committee for Energy and British Petroleum (BP)
2) Inflation and dollar parity dollars / euros. Sources: Ministry of Industry, for Brent, to the € / $.
3) World oil consumption. Source: French Union of Petroleum Industries.
4) Wage developments in France (based on SMIC). Source: INSEE
5) The evolution of purchasing power in France. Source: INSEE

By entering these data into a spreadsheet (eg OpenOffice, the free version of Excel), and mixing well everything we could reach various interesting curves.

We will not detail the method for reasons of readability, but invite you to express yourself about it on the forum topic: Historical earnings and oil revenues to between 1920 2006.

1) Evolution of world oil consumption between 1920 and 2006

Evolution of global oil consumption 20ieme century to 1920 2006

2) crude price per barrel between 1920 and 2006 2004 in constant $

evolution of prices in real terms oil and energy to 1920 2006

3) Change in revenue excluding oil between 1920 and 2006 2004 in constant $

changes in oil revenues in constant currency to 1920 2006

A small calculation lesson = 3 2 1 *
This curve is the simple multiplication of 1 curves) and 2).

Some analyzes:

  • Consumption has little importance in the oil revenues is mainly the price of crude which
    determines their income. A high price of crude is obviously favorable to their business since there is no "serious" alternative
    the oil that can be put in place very quickly.
  • This curve is largely reduced because it concerns only the crude oil product (see *). The real "revenues" of the oil must be multiplied by a coefficient 2 to 3 given the many taxations on this product.
    In other words: 1 crude yields between $ 2 3 $ $ and any tax included in those who exploit (including states).

4) Evolution of oil revenues on 1970-2006 period.

Between 1920 and 2006, oil revenues are relatively constant, post-1970 events and the countries of awakening emergence to set up a new world that is changing very rapidly
in comparison with the stability of the 50 years prior to 1970, even the XIXth World War is not "visible" on these curves.

The following curve, which is very variable and almost "sawtooth", shows that the "low" stability of crude oil prices is decidedly in the past and that, given the increasing demand,
trend should be as up ... although, as we will explain in a following article: the energy prices reported to the purchasing power is not (unfortunately for econologic) in 2005, as high as the media would have us believe!

changes in oil revenues in constant currency to 1970 2006

5) Accumulated oil revenues.

To conclude this article, here, for the same period in 1920 2006, accumulated oil still gains tax and dollar 2004 obviously.

oil money between 1920 2006 to

Some analyzes:

  • The revenues of oil have been rising steadily: it is related to the increase in demand
  • The oil grossed nearly $ 41 000 2004 Billions of between 1920 and 2006
  • This amount is largely minus for the same reasons as cited in 3) (see *)
  • This sum, minus recall, is to compare the cost of 5500 billion warming Stern Review thus seem ridiculous
  • A comparison to the evolution of global GDP would be appropriate (see *)
  • Oil is indeed the backbone of the global economy, not to mention the indirect wealth.

* No taxes or derivative is considered on this curve, much less wealth (as GDP) that allowed to create these barrels.
It would be very risky and daring to embark on a correction calculation of wealth creation oil according to the criterion of GDP.
Indeed; the data are too widely variables taking into account the evolution in time (currently set oil GDP over a $ there 30 years) and the global nature (geographical diversity) of these data.
Furthermore it is very difficult to estimate the global GDP before 1950 (at least we did not find, help would be welcome).

More:
- Discussing the method on the forums
- The reported oil purchasing power
- Retail in oil earnings since 2002

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