Oil Price Crises: Proposal
The importance of oil as a product in the world market has momentous ramifications if there is a variation in its price, whether upward or downward. This will bring about sweeping economic and political consequences (Klare 5). The world has witnessed a drop in the prices of oil in the international market. When making predictions in a recent book in 2011, Moors stated that a major problem was in the offing and that it involved financial and political consequences (4). Towards the end, the volatility nature of the oil market was considered; it would have a significant bearing, and the prices of oil would precipitate a crisis because of a reduction in its level. Predictions were that this would happen soon, and indeed the world has witnessed this (Moors 4). The oil price crisis has serious economic ramifications for those who rely on its exports to earn revenues, and has an effect on the investments on oil. Already, oil-exporting countries are cutting back on revenue generation forecasts and revising government expenditure as oil revenues decline, while investments in oil exploration and ‘unconventional’ productions are being reduced; geopolitical consequences are expected in the Russia-Ukraine crisis, ISIS in the Middle East and political changes in oil producing nations like Nigeria (Klare 6-8). To gain an understanding of the current oil prices crisis, the paper will highlight some areas involving the current international oil prices crisis. The main parts that the research paper will explore will include reason of current oil crisis; history of the oil crisis; the effect of the oil crisis on the world; production cut during the oil crisis; and an economic prediction of oil crisis ending.
Moors, Kent. The Vega Factor: Oil Volatility and the Next Global Crisis. John Wiley & Sons, 2011. Print.
Klare, Michael T. “The Oil Price Plunge.” Nation 300.8 (2015): 4-8. Web. 7 Apr. 2015.