Convergence of oil consumption: A historical perspective with new concepts

Growing concerns about long-run equilibrium in the oil market have focused on understanding time path of consumption across countries. This study examines convergence largest consumers. To this end, we employ historical data dating back to 1890 by benefiting from newly proposed concepts, including relative/club and weak σ-convergence, addition conventional β-convergence notion. The empirical results provide new insightful findings. First, considering common factors dynamics leads convergence. Second, overall evidence absolute has been at work among countries mainly before great depression 1890–1929, while divergence occurs after mid 1990s. Third, observed over last decades persists even accounting for either a relative or form convergence, supporting primary role current world markets. Divergence calls stricter energy transition policies. Moreover, clustering algorithm identifies unique convergent clubs, indicating that unified policy is not tenable.