GLOBAL OIL CRISIS , HISTORY AND INFORMATION

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GLOBAL OIL CRISIS

Oil is the major accelerator for powerful economies around the globe. The relative price inflates and pumps down according to the supply and demand relevance. When the demand is less the administration has to lower done the notes and when demand is more they have the power to charge at their desired rate. Oil is the most important driving force for major economic and political beats. It’s fluctuation in price for even a rupee drives a country bankrupt or make it the world power.

Two Major Oil Crisis in History

    1. Oil Crisis World War 2 period

There is two major oil crisis in history. First has it’s roots traced back to  1973, Post World War 2 period. When  OPEC ( Organization of the Petroleum Exporting Countries) decided to inflate the price of oil to $12 a barrel. Japan, Western Europe, and the United States were major world power consumers but they were prohibited for oil intake at that moment. All the capitalist World economy continued to stagnate throughout the 1970s because the inflation was not reversed until early 1980.

    2. Oil Crisis Iranian Revolution in 1979

The Iranian Revolution in 1979 bought with itself a major oil crisis. The unrest that held the whole region in that decade eroded the oil supplies. Iranian economy majorly depended on oil supplies but the revolution eradicated it’s economy big time. The situation aggravated following the Iran-Iraq war 1980-1988. Political and economical instability breathed throughout this era.

In 1981 the oil price bloated to $32 per barrel. At this point, the major oil supply and purchasing economies focused on oil crisis curtailment and found more technical solutions for the supply of oil. The technical and advanced methods proved very much in the favor of oil serving states and resulted in oil oversupply rather than a shortage.

Oil Crisis Pandemic COVID-19

This year is also historic in this context. Observers predicted that the price of oil may keep declining due to the Pandemic COVID-19 going around the world. Since the onset of this disease the oil prices have been deteriorating continuously but according to the digits it was possibly assumed that the prices might not bent down for a longer period of time but just recently the issue became a headline around the world.

The oil market was said to crash at the night of 21st April as the prices went below the belt at negative zero. At some stated of Canada it was said to purchase a barrel of oil for free and you would get rewarded with $35 for initiating to purchase. During the situation of lockdown that has been announced since mid march, all educational institutions have been closed, teachers, office workers also went on undefined leaves. The brand have shut down and inter countries flights have came to halt.

Inter cities transfer has curtailed to a big extent as the local transport also went under shutters. Due to this scenario the oil demand has cut down but the supplies keep on supplying. Due to this excess accumulation of oil and no purchasers, the prices, for the first time in history went to ZERO. The oil powers have been consulting over this issue but there doesn’t seem to be a clear solution yet.

 

 

by:  Maheen Khan

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