Impact of looming oil crisis on global trade
Impact of looming oil crisis on global trade
The availability of oil is taken for granted every day by businesses, governments and individuals alike. However, an oil crisis is looming and could feasibly hit at any point. This brings back memories of the oil shortages during the 1970s, which had a major impact on the economic growth, particularly in major industrial countries such as
United States.
During the 1973 oil crisis - an embargo initiated by the Organization of Petroleum Exporting Countries (OPEC) to protest against some of the
American trade practices. As a result of this embargo, the price of oil increased by 300%, causing widespread oil shortages and in some cases forcing petrol stations to close.
Experts have warned that a similar crisis may be imminent, with Western countries' presence in the middle east causing friction with some of the countries who are members of OPEC. Oil prices have been increased in many areas in an attempt to reduce consumption levels and protect our natural resources. However, research has indicated that despite these measures the consumption of oil continues to increase, with an estimated 89 million barrels of oil being used globally every day.
Should a crisis like this hit, the effect on the global economy will be huge - importing materials and goods has become an essential practice for larger organizations, but any increase in oil price would dramatically increase the transportation costs of importing and exporting. As a result, companies would need to either seek cheaper alternatives, or more likely raise the cost of their end product, something which will slow the growth of the economy and prolong the recession. Travel has become a major source of expenditure for large firms, with employees often flying to business meetings internationally as well as domestically. Budget airlines' turnover has grown throughout the recession as a result of the increase in business travel, however any
The availability of oil is taken for granted every day by businesses, governments and individuals alike. However, an oil crisis is looming and could feasibly hit at any point. This brings back memories of the oil shortages during the 1970s, which had a major impact on the economic growth, particularly in major industrial countries such as
United States.
During the 1973 oil crisis - an embargo initiated by the Organization of Petroleum Exporting Countries (OPEC) to protest against some of the
American trade practices. As a result of this embargo, the price of oil increased by 300%, causing widespread oil shortages and in some cases forcing petrol stations to close.
Experts have warned that a similar crisis may be imminent, with Western countries' presence in the middle east causing friction with some of the countries who are members of OPEC. Oil prices have been increased in many areas in an attempt to reduce consumption levels and protect our natural resources. However, research has indicated that despite these measures the consumption of oil continues to increase, with an estimated 89 million barrels of oil being used globally every day.
Should a crisis like this hit, the effect on the global economy will be huge - importing materials and goods has become an essential practice for larger organizations, but any increase in oil price would dramatically increase the transportation costs of importing and exporting. As a result, companies would need to either seek cheaper alternatives, or more likely raise the cost of their end product, something which will slow the growth of the economy and prolong the recession. Travel has become a major source of expenditure for large firms, with employees often flying to business meetings internationally as well as domestically. Budget airlines' turnover has grown throughout the recession as a result of the increase in business travel, however any