It’s the great mover of economies. Literally.

Oil has long been the resource of choice for powering moving things—transportation, as it were.

The reason is quite simple: Refined oil is packed with energy, largely stable, the center of its own massive logistics network, portable, and oh-so plentiful.

(It also happens to be a major contributor of CO2 emissions and slowly warming the planet toward the unknown, so… there’s that.)

As one could expect, the growth of economies would be a result of increased oil consumption. However, our recent analysis of regional trends in oil consumption and economic growth suggests that is not always the case.

The big growth story over the past several decades has been Asia. Similarly, the big growth story in oil consumption has been Asia. Since 2000, the Asian super-continent (along with Oceania) has increased oil consumption by an average of 2.5% per year.

However, we offer both Europe and North America as alternatives to the narrative that economies need growth in oil consumption to continue growth. Both regions house fully developed economies, and growth has come with only a 0.3% annual increase in oil consumption for North America and 0.1% for Europe.

This offers a new metric - at least new to us. GDP to oil consumption ratio. In other words, how much economic output was produced on 1 barrel of oil.

Considering oil’s dominance in Middle Eastern economies, it should come as no surprise that the region consumes nearly one barrel for each $103 the regional economy produces. For reference, oil is currently about $70/barrel.

As the regional economies develop and shift from agriculture to manufacturing to service, they no longer require such oil consumption. Europe and North America produce $315 and $289 of GDP for each barrel of oil consumed, respectively.

Of course, electrification of transportation has a lot to do with this metric, and the shift to electric rail and EVs helps maintain it. But consider that North America and Europe are also the largest aviation regions in the world, and the once-assumed dirty relationship between the economic benefits and the global warming downsides is not as clear-cut.

Then come the social benefits - or the S of ESG. Another topic entirely.

Still, the overall trend of developing economies has been continual economic growth without matching oil consumption. Progress, by any measurement.

Our research published this week:

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