2. How Oil Was Made?
 The first theory suggests that oil is a fossil fuel
 Some scientists believe in another theory. Twentieth-
century Russian scientists proposed the "abiotic"
theory.

3. Where is Oil Found?
 Saudi Arabia
 The Canada is the second largest (proven oil reserves) .
 Other countries like Iraq, Iran, Kuwait and the United Arab
Emirates and USA.
Other nations with large reservoirs of oil include:
 Libya
 Venezuela
 Nigeria
 Mexico
 Indonesia
 the EU nations
 Brazil
 China

4. OPEC
 Algeria  Libya
 Angola  Nigeria
 Ecuador  Qatar
 Iran  Saudi Arabia
 Iraq  United Arab Emirate
 Kuwait  Venezuela

5. Types of Oil
 Very Light Oils or Light Distillates
This oil type includes: Jet Fuel, Gasoline, Kerosene, Light Virgin Naphtha,
Heavy Virgin Naphtha, Petroleum Ether, Petroleum Spirit, and Petroleum
Naphtha.
 Light Oils or Middle Distillates
This oil type includes: Fuel Oil (grades 1 and 2), Diesel Fuel Oils (grades 1
and 2), Domestic Fuel, and Marine Gas Oil - Light Crude falls into this
category.
 Medium Oils - Most Crude Oil falls into this category
This type of oil MAY causes long term, severe damage to fish, waterfowl,
fur bearing animals and intertidal organisms. About 1/3 of medium oils
evaporate within 24 hours.
 Heavy Fuel Oils
This category includes heavy crude oil, Fuel Oil No. 3 & 4), Fuel Oil No. 5
(Bunker B), Fuel Oil No. 6 ( Bunker C), Marine Intermediate Fuel, and
Marine Heavy Fuel.

6. Three Influencing Factors of International Oil Price
The changing
1 supply-demand
structure
dominates oil price
Oil
Price 2
3

7. Old seven sisters

8. New seven sisters

9. What is Crude Oil?
 Crude oil is a naturally-occurring substance found in
certain rock formations in the earth.
 It is a dark, sticky liquid classified as a hydrocarbon. This
means, it is a compound containing mainly carbon and
hydrogen.
 Crude oil is highly inflammable and can be burned to
create energy.
 Petroleum= Petra (Rock) + Oleum (Oil)

10. Crude Oil Production
India
Thousand Barrels Daily
Kuwait
UAE
Mexico
Canada
China
Iran
US
Saudi…
Russia
0 5000 10000 15000
Source: BP Statistical Review of World Energy 2011

11. Crude Oil Consumption
Russia Thousand Barrels Daily
India
Japan
China
US
0 5000 10000 15000 20000 25000

12. India’s Oil Import
11%
34%
18%
5%
10%
22%
Iran Saudi Arabia
Other Western Hemisphere
Africa Other Middle East
Source: Global Trade Atlas

13. Consumption of Major Petroleum Products
9%
8%
40%
36%
7%
LPG Kerosene Diesel Petrol All other products
Source: Ministry of Petroleum Basic Statics

15. Crude Oil Price
Source:- Energy Information Administration and Bureau of Labor Statistics 2012

16. Who Uses Oil?
 The U.S. uses 25% of the estimated 80 million barrels of oil
produced around the world every day.
 The country that exports the most oil to America is
Canada, with Saudi Arabia second.
 The European Union (EU) also uses a large percentage of
the world's reserves.
 China currently ranks as the third-biggest oil consumer on
the planet.

17. Break up of cost calculated by the government.
• Basic Price: Rs 28.93
• Excise duty: Rs 14.35
• Education Tax: Rs 0.43
• Dealer commission: Rs 1.05
• VAT: Rs 5.5
• Crude Oil Custom duty: Rs 1.1
• Petrol Custom: Rs 1.54
• Transportation Charge: Rs 6.00
• Total price: Rs 58.90

18. India: Macroeconomic impacts of oil price rise
 No decline in consumption of crude and petroleum products.
 Increase in trade deficit.
 No effect on public spending on physical infrastructure and social
sectors .
 Increase in public spending on renewable energy development.
 Electricity pricing unlikely to be impacted.
 Natural gas prices increased 12% for the power and fertilizer
sectors, and 136% for other industrial consumers. No increase in
prices for small-scale industries and transport sectors.

19. India: Sectoral impacts of oil price rise
 Petroleum sector
 Transport sector
 Fertilizer sector

20. India: Microeconomic and poverty impacts of oil
price rise — community-wide impacts
 Income patterns
 Expenditure patterns
 Impact on major economic activity (agriculture)

21. India: Microeconomic and poverty impacts of oil
price rise — direct impacts on households
 Changes in energy expenditure
 Changes in energy consumption
 Transportation costs

22. To summarize the study
When Oil prices Moves UP :
1. Inflation increases
2. Govt. spending on subsidy increases
3. Foreign currency reserves reduce
4. Our export becomes weaker
5. GDP is affected negatively
6. Share market crumbles
7. Investment decreases