Whether they can't, or they simply don't want to, remains a matter of speculation. (NICOLA, 2008)
The battle for energy is shaping many conflicts of the present century, and those of future, but soaring oil prices not only have an impact on industrial production, but pose a greater threat to the end consumer and economy at large by have indirect effects on food prices, global industry, travel expenses, famine as more and more land is used to grow bio fuels and world food production is decreasing, the list can be endless.
'Unlike the previous oil shocks, which were more and less blamed on the imbalance between demand and supply, the current rise in oil prices is more complicated than just instability of demand and supply. So if one probes into the factors that have played a part in rising oil prices, one comes to a conclusion that there are a number of reasons ranging from a weak dollar to tensions between the U.S. and Iran. At the heart of the problem, though, is the fact that global demand is currently outstripping global supply. Countries such as China and India are thirsty for oil to fuel their economic growth, yet the world's oil-producing regions are producing less oil. In Nigeria, tensions in the Niger Delta region have curtailed production by nearly a million barrels a day. Fears of war between the U.S. and Iran, one of the world's biggest oil producers, have driven up prices further. And some of the world's major oil fields, the Cantarell Field in Mexico, for instance, are yielding disappointing amounts of crude oil this year, for geological, not geopolitical reasons.' (Weiner, 2007)
HIGH OIL PRICES: THE WINNERS AND LOOSERS OF THE GAME
In the political game revolving around the rise and fall of oil prices, there are some profit makers, while some are at the losing end. While it is obvious that the oil companies must be making huge profits, owing the fueling demand and high prices, it is the companies that specialize in withdrawing crude oil, who are the major profit holders.
'Exxon-Mobil, the world's largest publicly traded oil company, recently reported a profit of $9.4 billion. Impressive, more money than any publicly traded company has made in U.S. history.' (Weiner, 2007)
'The traditional big-oil producers, such as Saudi Arabia, Kuwait and other Persian Gulf nations, but also relative newcomers to the oil game, such as Kazakhstan and other nations that border the oil-rich Caspian Sea. Iran, Russia and Venezuela are also big winners. Higher oil prices might embolden leaders of those nations to play a more assertive role on the world stage and, in the case of Iran, deflect international pressure to dismantle its nuclear program.' (Weiner, 2007)
'At the losing end is any nation that is a net importer of oil, such as the U.S. and most European nations. The European pain, however, is blunted by the strong Euro and Europe's fuel-efficient transport systems. China is another loser. It's appetite for oil is seemingly insatiable, and it's already paying more for that addiction. India is potentially even more vulnerable: It uses less oil than China but imports 70 percent of it, compared with 50 percent for China.' (Weiner, 2007)
ECONOMIC COSTS OF HIGH PRICES
Recently, oil prices have leaped over $135 per barrel over night,