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.
1) We define "real" price, the price of oil corrected: not the price in currency (which strictly means nothing considering currency trends) but the price in constant currency adjusted by inflation .
2) A second correction is performed by comparing the price of oil to that of the purchasing power. Thus, we get what may be called a "fair price" or at least a "cheapest" because 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
2) crude price per barrel between 1920 and 2006 2004 in constant $
3) Change in revenue excluding oil between 1920 and 2006 2004 in constant $
A small calculation lesson = 3 2 1 *
This curve is the simple multiplication of 1 curves) and 2).
- Consumption has little importance in the oil revenues is mainly the price of crude which
determines their income. High crude prices is favorable recess their case because there is no alternative "serious"
the oil that can be put in place very quickly.
- This curve is largely undervalued as it only concerns the crude oil product (see *). The real "income" of oil should be multiplied by a coefficient to 2 3 given the many taxations 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
compared to the stability of 50 1970 years prior to even the 2ieme world war is not "visible" on the curves. "
The following curve, highly variable and almost "sawtooth", shows that the 'low' stable crude prices firmly in the past and that, given the demand for more and more important, the
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!
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.
- 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).