How is the oil industry subsidized?

How is the oil industry subsidized?

Oil revenues that are

The oil industry includes global processes of exploration, extraction, refining, transportation (often through tankers and pipelines) and marketing of petroleum products. The largest volume products in the industry are fuels (fuel oil) and gasoline. Petroleum is the feedstock for many chemical products including pharmaceuticals, solvents, fertilizers, pesticides and plastics.

Petroleum is an essential product for many industries, and is vitally important to the maintenance of industrialized civilization itself, so it is considered a critical industry in most nations. Oil fuels a very high percentage of the world’s energy consumption, ranging from 32% in Europe and Asia to 53% in the Middle East. In other geographic regions the energy weight of oil is as follows: South and Central America (44%); Africa (41%) and North America (40%).

Oil has been used since man’s early history as fuel for fire, and for warfare [citation needed]. Its great importance to the world economy developed, however, very slowly, with wood and coal being the main fuels used for heating and cooking, and whale oil the preferred fuel for lighting, until well into the 19th century.

Non-oil income examples

This IEA report included countries in the Middle East and Africa, such as Qatar, Iran and Nigeria, which in turn were among the most heavily subsidized for energy. It looked at how consumer and market prices varied, while the OECD specifically investigates specific measures in national budgets that support fossil fuels. “If other emerging countries had been included, then the total would have been much higher,” says Angus McCrone, senior analyst at Bloomberg New Energy Finance.

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“People are outraged when they find out that their taxes are being used to help the richest industry on the planet,” says Jamie Henn, strategy director of 350.org, a lobby group founded by environmentalist Bill McKibben to promote divestment from heavily polluting industries. “Financing fossil fuels is like buying typewriters at the dawn of the computer age.”

State oil revenues

Energy has become one of the major issues of global concern. Today -as much or more than major pandemics (AIDS, Avian Flu), ecological threats (devastation of rainforests, global warming) and issues such as migration- energy is at the center of the concerns of newspapers, academia and discussions in governments, multilateral organizations and companies.

With the end of the Cold War, scenarios of possible confrontations that do not arise from ideological disputes but from the supply of gas and oil and the security of the routes for transporting them have become more relevant. In this context, a map of possible conflicts shows renewed interest in places such as the Persian Gulf, the Caspian Sea, Nigeria, Angola, Algeria, Sudan, northern Siberia, the South China Sea, Indonesia and Venezuela.

This paper analyzes the influence that oil and gas is creating in the relations between Latin American states. Given the activism deployed by President Hugo Chávez in these matters, it will be approached from the Venezuelan policy and the possibilities that the use of oil as an instrument of power may have significant importance in the area, altering regional balances. The study is mainly based on political, geopolitical and international relations considerations.

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External indebtedness

The oil sector drastically reduced its investments, canceling or postponing projects because of the fall in crude oil prices, which have lost more than half their value since mid-2014 and are currently evolving at around $45 a barrel, deflated by surplus supply.

In geographical terms, the loss of appetite for oil in the developed countries of the Organization for Economic Cooperation and Development (-12 mbdj in 2040) will be offset by a growing voracity of the other countries (+19 mbd), especially India, which will constitute “the largest source of future demand growth,” explains the IEA.

Overall, total world energy demand will increase by 30% between now and 2040, 74% of which will be accounted for by fossil fuels (compared with 81% in 2014), as the anemic growth of coal will be offset by the dynamism of natural gas.

How is the oil industry subsidized?
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