Recent Oil Crisis
Oil is the major source of energy worldwide and it is expected to remain so over the next few decades. As the technology is changing our environment nowadays, oil has done it in the 20's and 30's. Ever since, then crude oil has become the main "raw" material in every economy no matter it is a developed one or it is in the developing process. The changes in the prices of the crude oil are making positive and negative implications on every economy. When these changes of prices are severe ones, one might easily conclude that an economy is going to face problems such as unfavorable supply shocks, or according to the theory adverse supply shocks. When these kinds of problem arise in the world oil market, it is usually described as a world oil crisis. The world has witnessed 2 major oil crises and it is facing another one at the moment. In order to discuss the recent oil crisis and its economic implications I am going to refer to the appropriated economic theory and I will also exam!ine the two previous oil shocks in the world. As I mentioned previously the major problem that an economy is facing during every oil crisis is the adverse supply shock. Adverse supply shocks are unexpected events that reduce aggregate supply and theref
ion from the recent oil crises, which are the petrodollar effect and the TAXES. To begin with, as the price of the oil increases also the demand for the dollar increases which implies that that the price for the dollar will increase respectively. The most crucial issue that the oil exporting economies should consider is the appropriate investment of the extra petrodollar earned because of the soaring prices. If it is going to be invested in the further development of the economies we might also have positive effects on the global economy. (Whither,2). But, according to Janet Henry who works for HSBC, says that oil prices would have to rise to some $70 a barrel before symptoms similar to those of the 70's began to appear . The next issue that I am going to present is the world petrol taxations. According to OPEC official "whenever the prices of oil products such as gasoline, diesel or heating oil rise, OPEC is usually made to scapegoat by some media, politicians and the general! ------------------------------------------------------------------------ Moreover, it is interesting to analyze the economic implications from the extra petrodollars gained from the increased prices. I will refer to an article, which has statistical data about the oil crisis that took place in the 70's. For instance the extra gained petrodollars from the crisis in 70's were lent to the developing countries in Asia and Latin America. (Whiter 2) According to mine reasoning that's the only positive aspect from facing an oil crisis. To wrap up, the macroeconomic theory and the implications from the previous crisis have assisted us to understand the implications from an oil crisis, and will also help us easily understand and explain the current oil crisis. ey are taking the biggest chunk out of every barrel sold. I do not negate that OPEC is not responsible for the oil crisis, but governments should seriously observe the high taxes policy on the most widely used commodity. As the last sentence of the previous paragraph put forward, I will ref
Some common words found in the essay are:
According OPEC, Exporting Countries, , Gulf Europe, America Whiter, Y1 Y2, Henry HSBC, oil crisis, Stewart Wallace, P1 P2, oil prices, adverse supply, Gregory Macroeconomics, world oil, economic implications, crude oil, supply shocks, oil price, oil crises, adverse supply shock, supply shock, adverse supply shocks, barrel refined oil, oil importing country, current oil crisis,
Approximate Word count = 1371
Approximate Pages = 5 (250 words per page double spaced)
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