Vietnam Net Oil Exports 2004 to 2010

Following are Vietnam's numbers from 2004 (their recent production peak) to 2010 where an oil production decline of 14% combined with a domestic oil consumtion increase of 31% results in a net oil export reduction of a whopping 83%.

2004:

Production: 430,000 bpd
Consumption: 260,000 bpd
Net Exports: 170,000 bpd

2010:

Production: 370,000 bpd (down 14%)
Consumption: 340,000 bpd (up 31%)
Net Exports: 30,000 bpd (down 83%)

This is a classic case of "Net Export" Math.

Looks like Vietnam will be a net oil importer, perhaps as early as this year or next year for sure.

As oil becomes more expensive due to extraction and processing price increases, many exporting nations continue to placate their populations with oil price subsidies, which induces an increase in internal consumption, reducing exports, which in turn promotes scarcity, which in turn raises oil prices.

Whitin this context then it's quite interesting to note that the domestic oil consumption market when considering all the OPEC countries including Russia as well as Mexico if fact is twice as large as the total domestic oil consumption in China. Add to that the fact all of these countries as well as china is on a steaday economic growth path thus will be consuming even greater amounts of oil domestically going forward. In fact all the decline of oil consumtion in the OECD is more than off set by the increase of oil usage in these "new" economies.

And sure they have what it takes to grow aggresively as OPEC members will earn an unprecedented $1 trillion this year, according to the US Energy Department, as the group's benchmark oil prices exceeded $100 a barrel for the longest period ever. They are promising to plow record amounts into public and social programs after pro-democracy movements overthrew rulers in Tunisia, Egypt and Libya and spread to Yemen and Syria.

The bottom line is that so far at least there ar no examples of any oil exporting countries (at least those with a material amount of consumption) showing a multiyear production decline, that have cut their consumption sufficiently to pull their net export decline rate above their production decline rate. Denmark is a case in point. From 2005 to 2010, their production fell at 8.3%/year, and they cut their consumption at 1.4%/year, but their net oil exports fell at 19.5%/year. They would have had to cut consumption at 8.3%/year to keep their net export decline rate down to 8.3%/year.

Chris Skrebowski interview
http://www.youtube.com/watch?v=NAdnuGUYXp8