Wednesday, November 25, 2009

Inelastic Russian Oil

Spot oil price versus Russian oil supply, 2001-2009.  Source: Supply is average of EIAIEA, estimates. Price is spot price of West Texas Intermediate according to EIA , adjusted for inflation using the CPI to Jan 2008 dollars.

It's interesting to look at a few of the larger producer countries through the lens of these price/supply scatterplots (introduced on Tuesday, following this week's main post).  In 2008, according to BP, the largest oil producers were as follows:

In general, oil supply is a long-tailed thing, with many countries in the world contributing to the overall supply.  However, Saudi Arabia and Russia are the twin largest suppliers, contributing a bit less than a quarter of the global supply between them.  Then comes the US quite a distance behind.

In this post, we look quickly at Russia - the graph is above and pretty much speaks for itself.  After the "Russian Revival" of the late 1990s and early 2000s, production is now not increasing with higher prices (and indeed not decreasing at lower prices either - Russia lately behaves like it pretty much produces what it can regardless of price, which seems to be in the 9.5-10mbd range).

1 comment:

Datamunger said...

So the 'rationality' in the oil market at the national level is concentrated in a single (non-Russian!) country. What a world...

A little while back in the Drumbeat there was an article on some Russian prof who was explaining their not joining OPEC. Because of corruption and other factors, their oil industry he claimed, was firmly outside government control.