The US, which is the world’s third largest producer of crude oil after Russia and Saudi Arabia, constitutes production of 9.023million barrels per day (bpd) i.e.10.74% of world oil production and consumes 18.6 million bpd. This shows that the US has been importing about 9 million bpd. The hovering consumer and world’s second largest economy is on the pace to be a world’s largest consumer of oil.

China, the world’s fifth largest oil producing countries producing 4.073 million bpd and consuming 10.3 million bpd, is moving ahead on the consumption level. The car demand has increased the demand for the oil. The three Chinese metro areas Beijing, Houston and Chengdu now each have more private passenger cars than New York City, with its 1.8 million cars. The growing of the middle class level migrants has rapacious demand to own the cars. The demand would further rally up with the relentless growth of the Chinese economy.

There are alternative sources of energies like electricity, natural gas and others but the demand for the crude oil is increasing day by day. The production of diesel and petrol operating automobiles and machineries are flourishing in the world consumer market as they are cheap and easily accessible to the middle income level groups instead of bio-energy operated automobiles.

Though the shale gas extraction though the hydraulic fracturing or ‘fracking’ is on practice nowadays, it can gain market shares against oil as a leading transport fuel in the future. It can be one of the alternative sources of energy avoiding the shortage of kerosene, diesel and gasoline. The US oil imports volume have declined and is on a way to self-sustaining on fuels, yet China, on the other way, is increasing its oil consumption year after year.

Shale gas revolution has massive implications for the oil price as its extraction can reduce the demand for the oil. With the alternate source of energy as shell gas, it can meet the high demand of fuels and rising prices of oil can be reduced. The inflation being directly related with the rise in the imported oil prices, it can be curbed to some extent with the extraction of this new source of energy.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.