1. Overview of international energy markets

Global Total Primary Energy Supply (TPES) also called fuel mix is a combination of various energy sources used in the international economy. Before 1950s, coal used to be the main primary energy source. Access to coal resources was partially a cause for intra-European conflicts of the first half of XXc. A shift from coal to oil occurred following technological changes in the transport sector. Since 1960s, oil dominates the global fuel mix, although coal continues to play a pivotal role in Asia.

Oil market development signifies an internationalization of energy trade. Geopolitical and economic tensions created preconditions for an oil shock of 1973. Subsequently a structural change occurred in international fuel mix: relative share of oil in the world energy production declined from 49% to 34%, share of gas increased, coal and traditional biomass slightly fell, there is also a boost of non-fossil energies: nuclear and renewable energy.

Energy demand per region has been also evolving with a clear shift from the west to the east. Indeed China and other East and South Asian countries are the fastest growing energy consumption areas. By contrast, the share of the OECD decreased from 60% in early 1970s to less than 49% by 2009. In the meantime, absolute figures of energy demand doubled.

Per sector the situation is the following: oil production remains very fragmented at the international level. Russia, Saudi Arabia and the US are the leading producers. No country or association of countries (i.e. OPEC) control up to 50% of the world oil production. Gas sector is less fragmented. Main producers and consumers are Russia and the US. By contrast, coal sector is the least fragmented at the level of production. However its political importance have been declined.

Interview with an independent energy analyst Andres Mäe represents an interesting perspective, which highlights the main energy market and technology trends. Andres Mae summarised main data from the International Energy Agency, British Petroleum and other relevant sources. The interview mentions main trends of each fuel as well as the impact of international energy markets on Europe.

Andres Mäe, Independent Analyst of energy policy

Interview questions:

1. Could you please describe the structure of global fuel mix?
2. What is the structure of European Union's fuel mix?
3. What are the prospects for the European Union energy policy?

Obligatory learning material

British Petroleum, Annual Energy Review, 2013

[Focus on the EU’s fuel mix, prospects of the EU’s energy demand, prospects of energy fuel dynamic, levels of the EU’s dependency in oil and gas as well as related prospects]

Optional learning material

IEA, World Energy Outlook, OECD, Paris, 2010

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