International Oil Market

China’s real GDP has increased continuously at surprising rate of 10% per year in recent years. Simultaneously with strong economic growth, its demand for energy is also surging rapidly. The figure 1 clearly shows about the oil consumption and production behavior of the country which tends the country to import from different countries. China produces 3798 thousand barrels per day and consumes 8200 thousand barrels per day of oil in 2009. This means that China has to import roughly 4402 thousand barrels per day to meet its consumption needs per day. In the year 2007, China was declared as the world’s third largest net importer of oil behind the U.S and Japan. In July 2005, the reform of the exchange rate system was introduced by the central bank of China. After the reforms, the exchange rate of yuan was set according to a basket of other currencies. At the end of 2007, the yuan was appreciated by 7.5% approx. against the dollar, in consequence of these reforms.

India

According to the Oil & Gas Journal (OGJ), India had second-largest amount of proven oil reserves i.e. 5.6 billion barrels in the Asia-Pacific region after China as of January 2009. With a population more than 15 % of the world and high rates of economic growth , India has become one of the important consumer of energy resources. In the year 2006, India was the sixth largest oil consumption country of the world. The worldwide credit and financial crises have slowed India’s significant economic growth especially in its manufacturing sector.

Due to this crunch, the GDP growth rates have turn down in 2007 from 9.3 % to 5.3 % in the last quarter of 2008. Despite of this slow economic growth, India's energy demand continues to rise. The accelerated country growth w...

... middle of paper ...

...mitted to increase the oil production to 4 million barrels per day by the year 2020. Kuwait survived the economic catastrophe on the strength of its budget surpluses mainly generated by high oil prices, posting its tenth successive budget surplus in 2008, before slipping into deficit territory in the year 2009. Foreign exchange rates of Kuwaiti dinar are quite stable if compared with dollar. Figure 6 above shows the production and consumption capacity of the country which clearly depicts the exporting behavior of the country. In the year 2009 the total oil production was 2350 thousand barrels per day where as consumption was only 320 thousand barrels per day which allow the country to export the oil to other nations and increase their income level. From the figure the it can also seen the how Iraq- Kuwait war in 1992 impact the Kuwaiti oil market and its production