Decline in Oil Prices | Free Essay Example

Decline in Oil Prices

Words: 579
Topic: Business & Economics
Updated:

The modern world is characterized by the opposition of blocks of states. Each of these blocks has its leader who determines the policy of this block. Being superstates, these countries fight for their dominance in the world, using all methods and remedies they have at their disposal. One of the main peculiarities of this struggle is the attempt of one state to destroy the economy of another and, as a result, make the opponent much weaker.

One of the main factors, which influence the incomes and prosperity of these superstates, is oil. Being the main energy source of our time, it became the power which determines policies of states and nations. That is why, it is not a surprise, that oscillations in oils price strike the whole world.

The current state of affairs is quite unique. The price of a barrel of oil now reaches the level last seen during the 2009 recession (Krauss para. 3). Moreover, some specialists say that it is not the end. However, being so low, this price seems to be a logical answer to the world political crisis which appeared after the events in Ukraine in 2014 and civil war which became the consequence of these events.

The USA lent its support to official Kyiv, while Russia sympathized adherers of separation from Ukraine. Being both reliant on the price for oil, Russia and the USA try to control the market and oscillations in price are the expected result of these attempts.

There are several reasons for such an unstable situation The first one is war in the Middle East and devastations connected with it. It is simply dangerous to work in these regions (Carlson para. 6). This fact can serve as the evidence of the increase of price for oil, however, it still remains low.

The reason for it is the attempts of leading oil producers to use this oscillation for their purposes and to make their states more powerful. Saudi Arabia, the biggest oil producer, is now winning in this war, lowering the prices (Critchlow para.1). However, this state will not be able to make the price lower, and that is why the world stays at the edge of a new crisis.

The current situation has a pernicious influence on the economies of all leading world countries. That is why different possible solutions are suggested as there is a great need instability to overcome the crisis. The first obvious way to make the price more stable is to end the conflicts in Ukraine and the Middle East, as they lead to great tension in the international relations and, as a result, oscillations in the price for oil.

The next decision is more complicated, though it can guarantee the absence of problems of this type in the future. A new way of oil extraction should be found to make the price more stable and get rid of monopolists (Austin para. 17). Moreover, the world is too dependent on this type of energy source, and some alternative ways of supplying the world with energy should be found.

Having analyzed the data, it is possible to make certain conclusions. Existing oscillations in the price for oil are the expected result of the world political crisis and attempts of superstates to destroy the economy of their opponents. That is why it is necessary to find a solution to existing political problems and suggest some new ways of oil extraction for the world economy to be more stable.

Works Cited

Austin, Steve. “Falling Oil Price slows US Fracking“. Oil-Price. 2014. Web.

Carlson, Debbie. “Collapse of oil prices leads world economy into trouble“. The Guardian. 2014. Web.

Critchlow, Anrew. “Saudi Arabia bets its future on ‘Berlin or Bust’ oil strategy“. The Telegraph. 2015. Web.

Krauss, Clifford. “Oil Prices: What’s Behind the Drop? Simple Economics“. The New York Times.  2015. Web.