The US Energy Information Administration recently released its report showing oil consumption by country updated through 2012. Based on this report, it appears that at current high oil prices, demand in both China and India is being reduced. Thus, for those who are wondering how high oil prices need to be, to be “too high,” the answer is, “We are already there. In fact, continued high oil prices are a big reason behind the recessionary forces we are now seeing around the world.”
A big part of China and India’s problems is that they, like the United States and most of Europe, are oil importers. In this post, I also explain why there is a big difference in the impact of high oil prices on oil importing countries compared to oil exporting countries.
Figure 1. Liquids (including biofuel, etc) consumption for China, based on data of US EIA, together with Brent oil price in 2012 dollars, based on BP Statistical Review of World Energy updated with EIA data.
Figure 2. Liquids (including biofuel, etc) consumption for India, based on data of US EIA, together with Brent oil price in 2012 dollars, based on BP Statistical Review of World Energy updated with EIA data.
We can see from Figures 1 and 2 that at 0 per barrel prices, there is a definite flattening in per capita consumption for both India and China. Per capita consumption is used in this analysis, because if total oil consumption is rising, but by less than population is increasing, consumption on average is falling.
