by Steve St. Angelo, SRSRocco Report:
Certain areas of the world are more vulnerable to economic and societal collapse. While most analysts gauge the strength or weakness of an economy based on its outstanding debt or debt to GDP ratio, there is another factor that is a much better indicator. To understand which areas and regions in the world that will suffer a larger degree of collapse than others, we need to look at their energy dynamics.
For example, while the United States is still the largest oil consumer on the planet, it is no longer the number one oil importer. China surpassed the United States by importing a record 8.9 million barrels per day (mbd) in 2017. This data came from the recently released BP 2018 Statistical Review. Each year, BP publishes a report that lists each countries’ energy production and consumption figures.
BP also lists the total oil production and consumption for each area (regions and continents). I took BP’s figures and calculated the Net Oil Exports for each area. As we can see, the Middle East has the highest amount of net oil exports with 22.3 million barrels per day in 2017:
The figures in the chart above are shown in “thousand barrels per day.” Russia and CIS (Commonwealth Independent States) came in second with 10 mbd of net oil exports followed by Africa with 4 mbd and Central and South America with 388,000 barrels per day. The areas with the negative figures are net oil importers.
The area in the world with the largest net oil imports was the Asia-Pacific region at 26.6 mbd followed by Europe with 11.4 mbd and North America (Canada, USA & Mexico) at 4.1 mbd.
Now, that we understand the energy dynamics shown in the chart above, the basic rule of thumb is that the areas in the world that are more vulnerable to collapse are those with the highest amount of net oil imports. Of course, it is true that the Middle Eastern or African countries with significant oil exports can suffer a collapse due to geopolitics and civil wars (example, Iraq, and Libya), but this was not a result of domestic oil supply and demand forces. Rather the collapse of Iraq and Libya can be blamed on certain superpowers desire to control the oil market as they are strategic net oil importers.
The areas with the largest net oil imports, Asia-Pacific and Europe, have designed complex economies that are highly dependent on significant oil supplies to function. Thus, the areas and countries with the largest net oil imports will experience a higher degree of collapse. Yes, there’s more to it than the amount of net oil imports, but that is easy gauge to use. I will explain the other factors shortly. If we look at the Asia-Pacific countries with the largest net oil imports, China, India, and Japan lead the pack:
China is a net importer of nearly 9 mbd of oil, followed by India at 4 mbd and Japan with 3.9 mbd. Thus, as these net oil imports decline, so will the degree of economic activity. However, when net oil imports fall to a certain level, then a more sudden collapse of the economy will result… resembling the Seneca Cliff.
We must remember, a great deal of the economic infrastructure (Skyscrapers, commercial buildings, retail stores, roads, equipment, buses, trucks, automobiles, etc and, etc.) only function if a lot of oil continually runs throughout the system. Once the oil supply falls to a certain level, then the economic system disintegrates.