Last week, for the first time in the history of the oil trade, the price of crude oil hit $139 a barrel. The ongoing conflicts in some oil-rich countries, especially Nigeria and Iraq, have been blamed for this latest development in a worsening world energy crisis. The four previous world oil crises were also mainly a result of political unrest
The first crisis some 35 years ago – on 17 October 1973, to be precise – came following the Fourth Arab-Israeli War, when Arab members of Opec in conjunction with Syria and Egypt (two nations fighting Israel at the time) decided not to ship oil to countries that backed Israel during the conflict. Six years later, in 1979, the second oil crisis occurred as a result of the revolution in Iran.
Coupled with strong panic all over the world, oil prices were far higher and forced the US, the worst hit nation, to introduce price controls, which stabilised the market until 1990, when the world witnessed yet another oil crisis due to the first Gulf War following then Iraqi leader Saddam Hussein’s invasion of Kuwait. The current crisis has its roots far back in 2003, when speculation surrounding the second Gulf War, and a terrible winter season experienced in the US, forced oil prices beyond the $40.42 per barrel recorded during the 1990 crisis. These factors, coupled with Opec countries’ selfish interest in reducing oil output when there was no need for such a reduction, have contributed to the situation that exists today.
Unfortunately, very little has been done by world leaders over recent years to find a solution to the soaring cost of oil. And judging by the extent of the problem, experts believe that most economies that depend on oil importation for their energy are likely to witness a recession in the coming years. For oil-producing nations, in contrast, it’s boom time again. Yet the majority of these countries are unlikely to exhibit any tangible benefits. This has been the case during previous energy crises, when the enormous wealth they generated was not put to good use. When one considers the wider implications of high oil prices, it's hardly in the interest of either oil producing nations or the consumers.
Everything must be done to avoid further energy crises if the entire world economy is to avoid total collapse. Metro Éireann acknowledges that it will be difficult to control the effects of natural disasters or severe weather that impact on world oil prices. However, we need to seriously push for the immediate resolution of all man-made conflicts that are impacting hugely on oil production and adversely affecting prices. As we ponder on the consequences of a continued energy crisis, it is also important that we think seriously about alternatives to oil. In addition, we need to find ways of conserving the energy we use for the future – a future that’s getting closer every day.
editor@metroeireann.com
