The Oil Shock

In “Oil: A global crisis,” Lean strongly says that global people are facing a critical situation about higher oil prices. Recently oil prices have risen steeply because of the Iraq war. He presents several reasons for rising oil prices after the Iraq war; for example, the Iraq government has dropped the flow of oil’s yield since the Iraq war. In addition, developing countries need increasing amounts of oil for their industrial development, like China. The author shows several prospects about oil prices in the future, and the most expected prospect is that the oil prices will rise successively until it is $200 a barrel by 2012.

This article gives information to me about the worry of higher oil prices. Now I am one of the concerned people about soaring oil prices. I will argue that there are reasons that oil prices have been rising recently. The reasons are change of world situation, economic demand, and energy exhaustion.

First, unstable international situations affect oil prices in the contemporary world. The U.S. and Britain caused the Iraq war, and it has brought about higher cost of oil. For example, this article says that Hussein’s regime pumped 3.5 million barrels of oil a day, but this has now fallen to just two million barrels (Lean, 2008, Para. 7). Also, the dollar’s value has fallen in the globe so the price of oil in dollars has gotten higher. For example, the Euro has higher value than the dollar over the last several years. It impacts indirectly on higher oil prices. Therefore, now the dangerous Iraq war and the weak dollar has sped the soaring oil prices.

Second, economic demand extends about energy. Every industrial area and personal life requires oil. So people want convenience and development; it requires lots of oil to operate transportation or factories. For example, developing countries have increased demand of oil in place such as China and Asian countries. Also, when people get the oil, the sale price is not the real oil price. This price includes taxes, refining, marketing and distribution along with pump price of oil. For example, we know that different states show different prices in the US. The highest prices of oil are usually in Hawaii, because it depends on a unique state law of oil. Therefore, increasing economic requirements and additional charges for oil make higher prices continue.

Finally, oil resources are decreasing in quantity in oil-producing countries. Oil resources are nonrenewable energy, so people won’t get the oil forever. For example, even though now a country is one of the world’s biggest producing countries, that country may have to reserve for its own needs. Also, the countries having oil resources are lucky compared to countries that need oil. For example, usually Middle East countries have enough oil, but larger numbers of countries didn’t have their own oil, like developing countries. Therefore, oil is fixed energy; people cannot create the oil, thus its extreme situation adds to soaring oil prices.

In conclusion, people are coping with higher oil prices now. These are serious problems of costly oil that are internationally at uncomfortable stages, due to increasing demands from economy, and depletion of oil resource. Now people strive for escaping this global crisis; thus, people need another kind of energy instead of oil. Therefore, people should use less oil and should study alternative fuels for the better future.

Reference:

Lean, G. (2008, May 25). Oil: A global crisis. Independent.co.uk. Retrieved on July 1, 2008, from: http://independent.co.uk/enviroment/green-living/oil-a-global-crisis-834023.html?service=print