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What Is Petroleum Economics?

The demand for oil can have an influence on politics, and vice versa.
Petroleum economics takes other subjects into consideration, such as international shipping.
Political relationships between countries is a factor to consider in petroleum economics.
The petroleum industry involves a complex balance of supply and demand.
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  • Edited By: Kristen Osborne
  • Last Modified Date: 11 October 2014
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Petroleum economics is a complicated series of political and economic interactions pertaining to the oil industry. While economics in general is a complex subject, in the case of oil, political concerns add a new layer to the study of economics. People who study petroleum economics need to be familiar with economics generally, but also geopolitical history and the history of the oil industry as a whole. Experts in this field can work for government agencies, oil companies, and private companies interested in the economics of oil production, transport, and refining.

As with economics in general, there are a number of approaches to petroleum economics. Many experts boil down economic activities to a balance between supply and demand. In this case, supply and demand are both influenced by political concerns. Political events can have an impact on oil supply as well as demand, and in turn, oil supply and demand can influence politics.

There are a number of theories to describe economic phenomena in the oil industry, as well as to explore political relationships and social phenomena. This branch of economics also includes a broad number of connected fields, including international shipping, agriculture, manufacturing, transport, and so forth. Understanding of these fields is important, as all of these industries are involved in the global demand for oil.

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People interested in this subject study a wide variety of topics, from theories about global oil availability in the future to the environmental costs associated with oil and gas production. They can apply their studies to shaping oil and gas policy, assisting companies with the development of new oil fields, and educating people interested in the economies and politics of oil-producing nations. Alternative energy is also a topic of study for some people in this field, as they are interested in the political push for the development of alternatives to oil, as well as the economic impacts of shifting energy supplies.

Colleges and universities all over the world offer coursework in petroleum economics, and in some cases, provide students with degrees in this field. Many people working in the subject have graduate degrees and have conducted research in this field. Discussions of the oil industry can be found everywhere from the pages of confidential government briefings to the front page of the newspaper, and there are ample employment opportunities available to experts in this particular area of economics.

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Discuss this Article

anon313168
Post 4

If you want to study this course in university, what subjects do you have to be familiar with, and what subjects do you do in your o levels.

parmnparsley
Post 3

What college offers the most prestigious masters in petroleum economics? I am just finishing my sophomore year as an economics major and I would like to pursue a graduate degree in petroleum or energy economics. I would like to find the best school now so I can figure out what I need to do to gain acceptance into the best institution.

GlassAxe
Post 2

@submariner- A number of schools that offer advanced degrees in energy and petroleum economics. You can find degree programs as advanced as a PhD in Philosophy of energy economics. What I have noticed about all of them is that they require an undergraduate degree in economics. The programs also have prerequisites requiring the prospective student to have a strong proficiency in calculus, statistics, and microeconomics. Any student looking to enter these programs should also have some undergraduate energy economics coursework before beginning the graduate program.

According to the BLS, job growth for economists will be slower than average within economics, but will be faster than normal in related disciplines like business, insurance and finance. The government, with the federal government employing more than 30% of the economists, employs more than half of professional economists. Most jobs also require the candidate hold a master's or PhD to land an entry-level job. However, the pay is worth the educational investment. Federal government economist salaries average over $105,000 per year.

submariner
Post 1

This article caught my attention because I never realized economics of petroleum was such a complex science. I never really thought about the petroleum industry being so complex that is had its own field of economics. However, thinking about it, there will be a greater need for petroleum economists as demand for energy grows.

I can also see demand for petroleum economists in the industrial sector, especially in industries that use large amounts of petroleum (i.e., plastics, asphalt, and chemicals). What I wonder is what other training it would take for an economics major to land a petroleum economics job. Would it be as simple as pursuing a graduate certificate, or would it require a more rigorous graduate degree.

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