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Sunday, 28 August 2016

Region quenches oil demand with end to subsidies | The National

Region quenches oil demand with end to subsidies | The National:

"Which region has contributed the most to growth in oil demand so far this century? China, of course, which gained 7.3 million barrels per day of consumption between 2000 and last year. Which is second? Maybe India, or Latin America? No, it was the heart of global oil exports, the Middle East, whose demand for its own crude swelled by 4.4 million barrels per day.

Swelling economies under the stimulus of high prices drove the Middle East’s oil thirst, as new gas guzzlers cruised freshly built highways. Lavish consumption was encouraged by subsidies, which kept Middle Eastern fuel prices the lowest in the world. Those same subsidies discouraged gas development, so some countries turned to burning oil for electricity. So 240 million people in the Middle East managed to increase their demand by more than did 3 billion Asians outside China.

Now all those factors have gone into reverse. The slowing of the region’s oil demand is a further factor prolonging the current oil price slump."

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