Trend of global oil supply chain change:Comparison based on physical and virtual oil trade

Abstract

[Objective] This study analyzed the trend of change of global oil supply chain from the perspective of comparing physical and virtual oil trade, so as to reveal the important role of virtual oil. [Methods] Based on the traditional multi-regional input-output table, this study constructed a multi-regional input-output model of oil, calculated virtual oil in oil trade from 2000 to 2016, and comprehensively examined the main countries of oil production, consumption, and trade and their flow relations from the dual perspectives of physical and virtual oil. The heterogeneity of oil trade in 189 countries (regions) and 26 sectors was discussed by distinguishing intermediate and final product. The trade balance and external dependence of physical and virtual oil were further analyzed, and the global implicit oil demand before 2030 was predicted according to the accelerated energy transformation scenario. [Results] The study found that: (1) Virtual oil production accounted for more than one-third of the total global oil production. Virtual oil production and consumption are mainly concentrated in countries (regions) with higher economic development levels, while physical oil production and consumption are mainly distributed in countries (regions) with abundant oil resources; (2) The total amount of virtual oil trade flowing to countries (regions) with higher levels of industrialization and economic development is greater than the corresponding amount of physical oil trade. The virtual oil trade played a positive role in promoting the global oil trade balance and supply security; (3) The pattern of oil trade between final products and intermediate products is opposite, and the exporting country (region) in intermediate product trade is transformed into the importing country (region) in final product trade; (4) From 2017 to 2030, the oil demand of most developed countries showed a significant downward trend, and the implied oil demand steadily decreased after reaching its peak in different years, maintaining around 150-200 million tons per year. [Conclusion] There are great differences between global physical and virtual oil trade, with significant spatial heterogeneity. The proportion of virtual oil represented by non-oil products in international trade is constantly increasing. Therefore, when formulating trade policies, it is necessary to consider regional differences.

Keywords

• |oil supply chain|virtual oil|trade balance|physical trade|multi-region input and output method|energy transition