A Look into the Largest Petroleum Product Market

When one wants to take a look into the largest petroleum product market, they need to look no further than gasoline (petrol) and fuel oil. These two products alone make up the majority of the petroleum market.

Petroleum is used as raw material for many chemical products and is vital to many industries. The petroleum industry represents the single largest industry in terms of dollar value in the world and oil accounts for nearly half of the United States energy consumption.

Oil has been used since very early in human history to keep fires going. As it evolved, it became more important in the economy. As oil fields were discovered and exploited, oil began to replace wood and coal as the main source of light and heating fuel. By the twentieth century, oil had become the most valuable commodity traded in the world markets.

As oil and gas became more valuable, quotas were place on the importation of crude oil so only a small amount could be imported from outside of the United States in order to protect domestic oil sales. This quota was abolished in the early nineteen seventies. In 1960, the Organization of the Petroleum Exporting Countries (OPEC) was formed to disallow companies from profiting by extracting oil globally. Their main purpose was to regulate the price of oil and OPEC required all companies involved in oil production consult with them prior to altering the price of crude oil.

OPEC has gained a great deal of political clout but most of its power came from America’s dependence on oil as the United States’ consumption grew by leaps and bounds. The increase in the consumption of fuel mostly came from automobile ownership, which grew significantly in the mid to late seventies. The increased need for petroleum was unlike anything the world had seen in the past. As the United States’ reliance on oil increased, it became necessary to assess our energy-related policies.

When looking into the largest petroleum product market we see that new technologies have allowed refiners to increase the yield per barrel yet the demand is higher than ever. Given this huge demand, oil has a significant potential to be used as a diplomatic tool.

In the early nineteen seventies, oil was used as such as tool with the Arab oil embargo that contributed to widespread panic and a forty percent increase in the price of gasoline as gas was rationed. Just as with our current economic downturn, Americans were living beyond their means. Hopefully, our current economic crisis will not require us to live within imposed limits again. It could very well be as we look into the largest petroleum product market that we have forgotten the lessons of the seventies and will again be subjected to limits since the petroleum industry is anticipated to be nearing the end of its lifetime by approximately 2050.