The Petroleum Industry also known as the Oil Industry is the world’s largest industry. It has a major effect on the world economy, is vital to many other industries and is of major concern to many countries who depend on foreign oil throughout the world. Many of the world’s wealthiest countries are often countries with large oil reserves. The world consumes 30 billion barrels of Oil per year. The price of all Commodities, Currencies, Stocks and Indices with Binary Options Trading though OneTwoTrade are either directly or indirectly influenced by the Petroleum Industry and the Price of Oil.
The 4 step process of the Petroleum Industry
There are 4 stages in the process of the Petroleum Industry. These stages are Exploration, Extraction, Refining and Transportation.
Oil Exploration is the process of specialists such as Petroleum Geologists searching for deposits beneath the Earth’s surface.
Extraction is the process of removing usable Petroleum from the earth. There are many different extraction methods including drilling and pumping. Offshore oil platforms, also known as oil rigs are used when this process is located at sea.
Refining is the process of separating the different components of Petroleum. The major useful end product components after the refining process include Gasoline, LPG (Liquid Petroleum Gas), Kerosene, Diesel Fuel, Lubricating Oils, Fuel Oils, Petroleum Coke and Paraffin Wax.
There are many different methods of transporting both unrefined oil and their end products. These transportation methods include Road, Rail, Sea and Pipelines.
The most common method of distributing Petroleum products such as Gasoline, Diesel Oil and Lubricating Oils to consumers are through networks of Service Station. These Service Stations are often franchised to individual owners through distribution companies. These companies are often the same companies that refine petroleum. Larger commercial customers who use large amounts of petroleum products will usually receive direct delivery from the distributors.
Price of Oil
Petroleum also known as Crude Oil is the most valued commodity traded on the world market.
The Price of Oil is determined by a variety of factors including supply and demand, political situations and wars in countries with major oil reserves, trade sanctions, protectionism, local taxes and competition. The world’s most influential factor on the price of oil on the world market is the organization OPEC.
OPEC (Organization of the Petroleum Exporting Countries) is a highly influential organization headquartered in Vienna, that was set up in 1960 with the purpose of collaboration of policies for the mutual benefit of member states. These policies are mainly related to Oil production targets and controlling the price of Oil. Members of OPEC include Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela.
Major Sources of Oil
The world’s largest Oil reserves are located in Venezuela, Saudi Arabia and Canada. The world’s 10 largest Oil companies in terms of Oil reserves are all state owned companies. They are Saudi Aramco (Saudi Arabian Oil Company), NIOC (National Iranian Oil Company), Qatar Petroleum, INOC (Iraq National Oil Company), PDVSA (Petroleum of Venezuela), ADNOC (Abu Dhabi National Oil Company), Pemex (Mexican Petroleum), NNPC(Nigerian National Petroleum Corporation), NOC(National of Corporation(Libya)) and Sonatrach(Algeria). In terms of Oil Production and Refining, the world’s 10 largest companies are Saudi Aramco, NIOC, ExxonMobil, PetroChina, BP, Royal Dutch Shell, Pemex, Chevron, Kuwait Petroleum Corporation and ADNOC.