If you are interested in learning about one of the most widely used commodities called crude oil, you are on the right page. There is a lot to know about this product, such as its global use, business decisions, and origins. Let’s take a look at some of the important facts.
1) It is a natural resource
Crude oil is basically a natural product, consisting of a little sulfur, oxygen, nitrogen, and more hydrocarbons. It is formed from what is left of small animals and plants under the earth’s surface after millions of years. Many natural factors such as pressure and heat convert the remains to oil.
Depending on the type of oil and the extraction method, you can classify it as heavy, extra heavy, medium or light.
2) Crude oil is used in production processes
Crude oil is on the list of the most important energy sources on the planet. It is burned to produce heat for fuel. Apart from this, it is used in asphalt, lubricants, waxes, and many other petrochemicals. These products are later used and converted into other products such as clothing and plastics.
It is surprising to know that everything we see around us depends on crude oil during the production process.
3) 5 countries produce 50% of the oil used worldwide
In 2017, Saudi Arabia, the United States, Iran, Russia and Canada produced around 46 million out of 92 million barrels of oil. The rest of the oil is produced by other countries in the world.
The price of this product is affected by many factors, such as political uncertainty and the weather. For example, in adverse weather conditions, it is not possible to extract oil from the soil, which can lead to a shortage of the product. As a result, prices go up. Therefore, experts take these factors into account to ensure that there is no shortage of oil.
4) Daily consumption
The width, length and depth of an Olympic swimming pool are 25 meters, 50 meters and 2 meters respectively. To fill one of those reserves, up to 1,577 barrels of crude oil may be needed. You will be surprised to know that this is the amount of oil consumed in the world in two minutes.
Now if traders learn that oil use is increasing, it gives them an indication that demand for the commodity is going to increase. So, crude oil is considered an indicator of the economic health of the world. In a strong economy, the use of oil continues to increase.
5) Daily consumption in the US.
In the United States, the daily import of oil is 8 million barrels. While the US tops the list when it comes to oil production, it still imports about 8 million barrels per day. There are two reasons behind this. First, oil consumption in the United States is relatively higher than in other countries. Second, not all of the oil the country produces is up to the task.
So, these are 5 facts about crude oil that may interest you.