Could high oil prices devastate the world economy?
Oil prices are on the increase again amid concerns about disruptions to supply.
Protests in Ecuador and Nigeria have affected output in recent weeks, and some production is offline in India and the North Sea.
There is also concern that supplies from Iraq will be disrupted while the country’s leaders argue over access to oil during constitutional negotiations.
Oil prices rose to a record of $67.10 a barrel two weeks ago.
Has oil production peaked? Will prices rise again? How will the global economy be affected? Have you stopped using your car since petrol prices went up?
EB: To express your opinion, go to the original article.
The following comments reflect the balance of opinion we have received so far:
Simon, Warwick, UK
I would very much like to see oil prices increase significantly. Much of the current wastefulness stems from low prices that do not reflect the environmental cost associated with use of such fuel. Much of Europe pays significant tax, though sadly this is often squandered on things other than alternative fuel technology, public transport, conservation initiatives and environmental aspects. Roll on the day oil is $100 a barrel and petrol $7 a gallon.
Simon, Warwick, UK
I remember back in the 70’s in the US when the oil crisis really hit home and everyone suddenly woke up to the fact that we were oil junkies, and our dealers had cut off our supply. At that time everyone talked of alternative energy resources, people started to car pool, there was a lot of talk of alternative energy resources and the trend started moving towards fuel economical vehicles. Now Americans think of cars as a God given right and necessity, where in reality we should have been busy biding affordable mass transit systems accessible to everyone. I have now lived in Hong Kong for 20 years and I remember going through withdrawal symptoms of not being a car owner, but that quickly passed when I discovered life is so much easier without cars and cheaper as well as long as you have good public transport. We are living in a fools paradise if we think we can continue to waste this resource at the pace we are going.
David, Hong Kong
Oil consumption and production is only part of the problem. Alternatives to oil exist but at present governments have chosen not to take them into mass production and why, because Governments and big business have vested interests in keeping the world economy based on oil.
Ian, Bradford, UK
The Swedes have also seen a marked increase in fuel prices over the last month or two. In my view people won’t stop using their cars until there’s no more petrol. We need to also consider how the oil price increase affects the plastics industry. If there’s no more oil, it’s not just cars that will stop running – anything containing plastic will no longer be produced.
Dawn, Sweden
I believe we are seeing the end of “cheap” oil
Dan, Yateley, UK
I believe we are seeing the end of “cheap” oil. Demand is increasing exponentially due to the blooming economies of the Far East and India, and discoveries of significant new reserves are at best, sporadic. More worryingly, there is increasing evidence that proven reserves boasted by many OPEC members have been exaggerated for political purposes. While oil remains so vital to our entire way of life, prices cannot fall. Unfortunately, that same dependence will mean usage will not decrease either – the economy will simply take the hit.
Dan, Yateley, UK
Wasn’t that illegal war thing in Iraq supposed to secure loads of oil for the West? Why didn’t we spend all those billions of dollars developing renewable energy instead? Maybe then the world wouldn’t be in the mess it is now – global warming, terrorism, fragile oil-economies… The Bush administration has a lot to answer for.
Simon, London, UK
It will concentrate the mind and make us a) conserve what we have b) look for alternatives c) re-evaluate our profligate lifestyles.
James Butler, County Kerry, Ireland
2003 was the first year in a long time when no new oil fields were found
Simon Atkinson, Worcester, UK
It’s difficult to say whether oil production has peaked or not. There is no consensus at the moment inside, or outside, the industry. But 2003 was the first year in a long time when no new oil fields were found. What is guaranteed is that consumption will rise dramatically in the next 25 years from 75m barrels per day to 120m barrels a day in 2030. The law of supply and demand means that prices will rise as oil becomes more scarce.
Simon Atkinson, Worcester, UK
The rise in oil prices are nothing more than speculators and suppliers milking the political situations for all it is worth. Everyone wants to make a profit. Living in the USA, I know gas is dirt cheap compared to other places in the world. Have higher prices changed my behaviour? No, because I use mass transit during the week and the trips I make on the weekends are in line with my budget. I do feel for the people that require constant travel for their job. I refuse to believe that auto makers cannot make a clean and fuel efficient vehicle at an affordable price.
GAJ, New York, USA
I doubt that anyone really knows whether production has peaked yet or will do so soon. The official figures for known reserves are very unreliable and in many of the major producers they have not been revised in over 20 years. The cost of developing new fields or even prospecting for them is very high and probably will soon be unrealistic. Consumption is still increasing especially in China and other Asian countries. In the US there is little real conservation of current stocks or reduction in the need for oil as witnessed by the energy bill signed recently by President Bush. The $3 gallon at the fuel pump in the US is soon to be a reality, which is probably a good thing as it may, finally, alert the US people to where their laissez-faire attitude to energy conservation is heading.
Clive, Milwaukee, USA
