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The Changing Anatomy of U.S. Oil Imports Over the Last Decade

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The Changing Anatomy of U.S. Oil Imports Over the Last Decade

The Changing Anatomy of U.S. Oil Imports

In 10 short years, Canada has replaced the once mighty OPEC

The Chart of the Week is a weekly Visual Capitalist feature on Fridays.

OPEC was once a name that made world leaders shake in their boots.

In the early 1970s, the infamous oil cartel controlled more than 50% of global market share. The power of the cartel was also clear – in response to the Yom Kippur War of 1973, many OPEC countries (that were a part of OAPEC – the Organization for Arab Petroleum Exporting Countries) initiated production cuts and an oil embargo against Western countries.

Oil prices quadrupled from $3 to $12, and OPEC producers raked in the cash.

Meanwhile, the West was in a panic. Emergency energy rations were imposed, currencies were devalued, gasoline sales were restricted, and Sunday driving was banned in seven European countries.

No Longer Mighty?

The organization still has some influence, though it seems to be harder to come by.

After many months of squabbling, OPEC recently came to its first deal to cut production since 2008. That’s kept the oil price above $50/bbl, but gains will be effectively capped once low-cost shale producers ramp up production again.

OPEC often touts its 81% share of global “proven” reserves as a sign of its might:

OPEC's market share of crude oil reserves.

However, it seems OPEC’s peak influence is in the rear-view mirror due to several external factors.

To start with the obvious, oil is slowly waning in importance in the global energy mix. According to the EIA, oil made up 34% of total global energy demand in 2010. By the year 2040, the EIA expects this share will be closer to 30%, though things could happen faster if the technology behind renewables and batteries makes a bigger impact than expected.

Next, U.S. domestic production has almost doubled because of the shale and fracking revolution. In 2008, the U.S. produced 5.0 million bpd, and in 2015 the country averaged 9.4 million bpd.

Lastly, as you can see on the chart, accelerated development of Canada’s Oil Sands has enabled the U.S. to buy any imports needed from Canada instead of the Middle East. In 2005, Canada only supplied 16.1% of U.S. oil imports, but Canada is now the major supplier of oil to the U.S. with a massive 43.0% share.

With Donald Trump taking the reins in 2017, Obama’s decision on the Keystone XL pipeline could easily be reversed and then fast-tracked for completion. Such a move could bump Canada’s share of U.S. oil imports even higher, downsizing influence from OPEC even more.

Internal Friction

It’s not just a changing global macro environment that is hurting OPEC’s influence.

Internally, their members have shifting goals and needs, and this has made the organization largely dysfunctional over recent years.

The biggest factor? It’s Saudi Arabia, a country that is the largest oil producer in the group, but also a global low-cost leader. It has outsized influence in the cartel, but it also has way bigger margins to play with. This means that sometimes maintaining market share is more important than maximizing profit margins for the Saudis, and other countries disagree with this stance.

With the Saudis finally capitulating to a production cut, maybe the OPEC forces can remain aligned over the near-term. Then again, it might be a temporary fix as OPEC influence continues to slowly sink – especially now that OPEC as a whole is only the second biggest supplier of imports to the U.S., and shrinking.

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Chart of the Week

The Best and Worst Performing Wealth Markets in the Last 10 Years

This telling chart shows how national wealth markets have changed over the past decade, highlighting the biggest winners and losers.

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The Best and Worst Performing Wealth Markets

A lot can change in a decade.

Ten years ago, the collapse of Lehman Brothers sent the world’s financial markets into a tailspin, a catalyst for years of economic uncertainty.

At the same time, China’s robust GDP growth was reaching a fever pitch. The country was turning into a wealth creation machine, creating millions of newly-minted millionaires who would end up having a huge impact on wealth markets around the world.

The Ups and Downs of Wealth Markets (2008-2018)

Today’s graphic, using data from the Global Wealth Migration Review, looks at national wealth markets, and how they’ve changed since 2008.

Each wealth market is calculated from the sum of individual assets within the jurisdiction, accounting for the value of cash, property, equity, and business interests owned by people in the country. Just like other kinds of markets, wealth can grow or shrink over time.

Here are a few countries and regions that stand out in the report:

Developing Asian Economies
In terms of sheer wealth growth, nothing comes close to countries like China and India. The size of these markets, combined with rapid economic growth, have resulted in triple-digit gains over the last 10 years.

For the world’s two most populous countries, it’s a trend that is expected to continue into the next decade, despite the fact that many millionaire residents are migrating to different jurisdictions.

Mediterranean Malaise
European nations saw very little growth over the past decade, but the Mediterranean region was particularly hard-hit. In fact, eight of the 20 worst performing wealth markets over the last decade are located along the Mediterranean coast:

Rank (Out of 90)Country% Growth (2008-2018)
89๐Ÿ‡ฌ๐Ÿ‡ท Greece-37%
87๐Ÿ‡จ๐Ÿ‡พ Cyprus-21%
86๐Ÿ‡ฎ๐Ÿ‡น Italy-14%
85๐Ÿ‡ช๐Ÿ‡ธ Spain-13%
84๐Ÿ‡น๐Ÿ‡ท Turkey-11%
82๐Ÿ‡ช๐Ÿ‡ฌ Egypt-10%
80๐Ÿ‡ซ๐Ÿ‡ท France-7%
76๐Ÿ‡ญ๐Ÿ‡ท Croatia-6%

European Bright Spots
There were some bright spots in Europe during this same time period. Malta, Ireland, and Monaco all achieved positive wealth growth at rates higher than 30% over the last 10 years.

Australia
While it’s expected to see rapidly-growing economies as prolific producers of wealth, it is much more surprising when mature markets perform so strongly. Singapore and New Zealand fall under that category, as does Australia, which was already a large, mature wealth market.

Australia recently surpassed both Canada and France to become the seventh largest wealth market in the world, and last year alone, over 12,000 millionaires migrated there.

Venezuela
The long-term economic slide of Venezuela has been well documented, and it comes as no surprise that the country saw extreme contraction of wealth over the last decade. Since war-torn countries are not included in the report, Venezuela ranked 90th, which is dead-last on a global basis.

Short Term, Long Term

In 2018, global wealth actually slumped by 5%, dropping from $215 trillion to $204 trillion.

All 90 countries tracked by the report experienced negative growth in wealth, as global stock and property markets dipped. Here’s a look at the wealth markets that were the hardest hit over the past year:

Wealth MarketWealth growth (2017 -2018)
๐Ÿ‡ป๐Ÿ‡ช Venezuela-25%
๐Ÿ‡น๐Ÿ‡ท Turkey-23%
๐Ÿ‡ฆ๐Ÿ‡ท Argentina-20%
๐Ÿ‡ต๐Ÿ‡ฐ Pakistan-15%
๐Ÿ‡ฆ๐Ÿ‡ด Angola-15%
๐Ÿ‡บ๐Ÿ‡ฆ Ukraine-13%
๐Ÿ‡ซ๐Ÿ‡ท France-12%
๐Ÿ‡ท๐Ÿ‡บ Russia-12%
๐Ÿ‡ฎ๐Ÿ‡ท Iran-12%
๐Ÿ‡ถ๐Ÿ‡ฆ Qatar-12%

The future outlook is rosier. Global wealth is expected to rise by 43% over the next decade, reaching $291 trillion by 2028. If current trends play out as expected, Vietnam could likely top this list a decade from now with a staggering 200% growth rate.

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Chart of the Week

Mapping the World’s Busiest Air Routes

Flying can get you almost anywhere, but often people are journeying between two popular destinations. Here we map the busiest air routes globally.

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Mapping the World’s Busiest Air Routes

Modern air travel gives us almost unlimited possibilities for getting around.

Whether you are acting on your wanderlust to explore new and exotic destinations, hopping to a familiar island for a well-deserved vacation, or jetsetting to London in the comfort of business class, the modern airline industry can get you almost anywhere you need to go.

But while flying allows us to have unique experiences, it’s often the case that we are all coming and going from many of the same popular destinations. As a result, the world’s busiest air routes have hundreds of flights per day connecting important city pairs together.

Ranking City Pairs

Today’s chart pulls data from OAG, which has compiled a detailed report ranking the busiest domestic and international air routes from around the globe.

It’s worth noting that the data is over the period of March 2018 to February 2019, and it excludes carriers that operate fewer than 500 routes per year.

Let’s dive in to see which city pairs have the most air travel between them.

Domestic Routes

Domestic routes are far more popular than international routes globally. According to the report, there are 15 domestic routes that have more operating flights per year than any international route anywhere.

Here’s a look at the top 10 domestic routes:

RankCountryCity PairFlights (Annually)Carriers
#1๐Ÿ‡ฐ๐Ÿ‡ทJeju โ†”๏ธ Seoul79,4607
#2๐Ÿ‡ฆ๐Ÿ‡บMelbourne โ†”๏ธ Sydney54,1024
#3๐Ÿ‡ฎ๐Ÿ‡ณMumbai โ†”๏ธ Delhi45,1886
#4๐Ÿ‡ง๐Ÿ‡ทSรฃo Paulo โ†”๏ธ Rio de Janeiro39,7473
#5๐Ÿ‡ฏ๐Ÿ‡ตFukuoka โ†”๏ธ Toyko39,4064
#6๐Ÿ‡ป๐Ÿ‡ณHanoi โ†”๏ธ Ho Chi Minh City39,2913
#7๐Ÿ‡ฏ๐Ÿ‡ตHokkaido โ†”๏ธ Tokyo39,2714
#8๐Ÿ‡ฎ๐Ÿ‡ฉJakarta โ†”๏ธ Surabaya City37,7626
#9๐Ÿ‡บ๐Ÿ‡ธLos Angeles โ†”๏ธ San Francisco35,3655
#10๐Ÿ‡ธ๐Ÿ‡ฆJeddah โ†”๏ธ Riyadh35,1495

The busiest domestic route might be a surprise, unless you are familiar with Asian geography.

With almost 80,000 annual flights, the 300-mile hop between Seoul and Jeju Island in South Korea is the busiest air route in the world by a large margin. Overall, there are seven carriers competing on it each day, with over 200 daily flights available between them.

What makes Jeju so popular?

Known as the “Hawaii of South Korea”, this volcanic island is an extremely popular vacation destination within the country, and it hosts roughly 15 million guests per year.

International Routes

On an international basis, the busiest route has almost 50,000 fewer flights per year than the Jeju-Seoul city pair listed above. Not surprisingly, this route – and many other top international routes – are also located in the Asia Pacific region.

RankCountriesCity PairFlights (Annually)Carriers
#1๐Ÿ‡ฒ๐Ÿ‡พ๐Ÿ‡ธ๐Ÿ‡ฌKuala Lumpur โ†”๏ธ Singapore30,1878
#2๐Ÿ‡ญ๐Ÿ‡ฐ๐Ÿ‡น๐Ÿ‡ผHong Kong โ†”๏ธ Taipei28,4475
#3๐Ÿ‡ฎ๐Ÿ‡ฉ๐Ÿ‡ธ๐Ÿ‡ฌJakarta โ†”๏ธ Singapore27,0467
#4๐Ÿ‡ญ๐Ÿ‡ฐ๐Ÿ‡จ๐Ÿ‡ณHong Kong โ†”๏ธ Shanghai20,6785
#5๐Ÿ‡ฎ๐Ÿ‡ฉ๐Ÿ‡ฒ๐Ÿ‡พJakarta โ†”๏ธ Kuala Lumpur19,7418
#6๐Ÿ‡ฐ๐Ÿ‡ท๐Ÿ‡ฏ๐Ÿ‡ตSeoul โ†”๏ธ Osaka19,7118
#7๐Ÿ‡บ๐Ÿ‡ธ๐Ÿ‡จ๐Ÿ‡ฆNew York (LGA) โ†”๏ธ Toronto17,0383
#8๐Ÿ‡ญ๐Ÿ‡ฐ๐Ÿ‡ฐ๐Ÿ‡ทHong Kong โ†”๏ธ Seoul15,7709
#9๐Ÿ‡น๐Ÿ‡ญ๐Ÿ‡ธ๐Ÿ‡ฌBangkok โ†”๏ธ Singapore14,6985
#10๐Ÿ‡ฆ๐Ÿ‡ช๐Ÿ‡ฐ๐Ÿ‡ผDubai โ†”๏ธ Kuwait14,5814

The short hop between Singapore and Kuala Lumpur takes only one hour, and it connects two major Southeast Asian commercial hubs. The route has 41 flights per day between eight airlines, making it one of the most competitive routes globally.

The busiest international route outside of the Asia Pacific is between Toronto and New York (LaGuardia) with 17,038 annual flights. Interestingly, it only has three competing carriers – the lowest of any of the top 10 routes.

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