An explosion of oil and gas production in the United States, Australia and China has led to a surge in global supplies, according to a study.
A study released by the Organisation for Economic Co-operation and Development (OECD) shows the boom has pushed global supply to a level not seen since the 1960s, even as demand remains relatively flat.
China has been the world’s biggest consumer of crude oil, with global crude oil demand growing by nearly 30 per cent to 1.24 trillion barrels annually, according the OECD.
While China remains a significant global producer of crude, Australia’s oil boom, which started in 2008, has helped boost its output by more than a quarter to nearly 1.3 trillion barrels a day, according OECD data.
Australia, which has long relied on imports, is now exporting more than any other country in the OECD and is the world lead in exporting crude oil.
The surge in demand has helped Australia produce more oil than any of the 34 OECD countries.
“This is a positive story for Australia, for our economy, for the global economy,” Australia’s Energy Minister Josh Frydenberg said.
OECD data showed Australia’s crude oil exports increased by a further 4 per cent in the 12 months to June, a result that has been largely driven by demand for crude in China and China’s growing domestic production.
That has led China to expand its domestic oil production by more over the past year, leading to the largest increase in global oil exports since 2000.
It is also responsible for Australia’s largest rise in global production since 2002.
By contrast, the OECD says demand for refined products has been weaker.
Refined products account for about 40 per cent of the OECD’s oil production, compared with 45 per cent for crude and 28 per cent from natural gas.
This year, China’s crude output rose to 5.7 billion barrels, a 20 per cent increase over the previous year.
That is less than the 10.6 billion barrels the OECD said was expected in the second half of 2018.
However, the rise in demand for energy has been accompanied by a sharp decline in Australia’s energy exports.
At the end of June, the country’s crude exports stood at just over 5.5 billion barrels a year.
But by the end, the gap had widened to nearly 6.2 billion barrels.
Since the global downturn, Australia has increased its exports from crude to liquefied natural gas and other forms of liquefaction.
Meanwhile, demand for petroleum products has also been rising, driven by the increased production of natural gas, which is now the world leading energy fuel.
In the third quarter of 2018, Australia exported 1.8 million barrels of crude to China.
On a per capita basis, Australia is now more dependent on energy exports than any country in Europe and the United Kingdom, the study said.