How Big Is The Crude Oil Supply
Michalis 'BIG Mike' Kotzakolios


Defined Tag: Crude Oil Supply.

What is the crude oil supply? This term is actually ambiguous and can refer to several different things. First, it can refer to the total amount of oil in the ground according to what current mapping technology has revealed. Another term, which could be used interchangably, is total crude oil reserves. In addition to this meaning, the crude oil supply can simply refer to what suppliers are currently putting on the market. Whichever meaning of supply you use, crude oil still means the same thing: it is simply unrefined oil; or, in other words, unrefined combinations of hydrocarbons, which cannot be used to create energy until they are refined.

When it comes to determining how much crude oil is hidden deep within the earth, that number is not known. Several estimates have been made of the amount of crude oil in deposits that are already known. One estimate is about 1.2 trillion barrels, although higher numbers have been offered. Although those amounts of crude oil are estimated to be in the ground, only about one-third of that is readily available. That is because of difficulties in reaching and pumping all oil in a given deposit. Consumption of the crude oil supplies has been estimated at 31 billion barrels per year. Different sources may provide different estimates of the world's crude oil supplies.

But before oil can be counted as part of the available supply, it must first be located and extracted from the Earth. Sophisticated locating and mapping techniques are used to estimate where oil might be hiding in deep rock formations. These techniques include magnetic, gravimetric, and seismic tests. Once an expected supply of crude oil has been located, workers must drill through several miles of solid rock to reach it. If the drilling is successful, the well is capped so that the crude oil does not gush out uncontrollably. These drilled crude oil supplies are then pumped out for transportation and refining.

Refining is the process of turning crude oil supplies into usable products. Crude oil contains many different grades or fractions of petroleum products. Crude oil is distilled with heat and the various fractions are captured and condensed as they boil out of the crude. Some of the fractions include gasoline, diesel and heating oil. That means that only part of the world's crude oil supplies is made into gasoline.

Not surprisingly, the Earth continues to manufacture crude oil beneath rocks and under the ocean floor. Unfortunately, some people mistake this to mean that the crude oil supply is expanding at a rate faster than it is demanded. This is not the case. In fact, the amount of oil being created is absolutely trivial when compared with the rate at which it is being extracted. Current rates of extraction, which are projected to increase, could result in the depletion of all reserves as early as several decades from today.