O I L PRICES
167
Not only is the price of crude oil subject to composition of the
crude, but the price of crude oil is combination of the following
factors:
1. The price set by the producer nations
2. Continued high demand in the industrialized world
as seen in the increase in gas-guzzling vehicles such
as the SUV
3. Increased car ownership in developing world where
India and China are rapidly developing nations with
need for petroleum and petroleum products, and
4. A host of international factors such as the Second Gulf
War, and US-Iran tensions, to name only two of the
last category.
Each of these has contributed significantly to the price of crude
oil, and the United States, rightly or wrongly, has contributed to
almost all of the above issues with soaring demand, invading Iraq,
and raising tension with Iran.
Crude oil price has been hostage to the world events. Also,
production cuts or restoration by OPEC gravely impact the market
place. Since the year 2000, the following political events impacted
the oil prices:
• September 11 2001 attack the World Trade Center
• Gulf War II begins in early 2003
• Insurgency in Iraq (2003 to present)
• Iranian nuclear debacle started in 2005
• Russian entry into the world market from year 2000
onwards
• Hurricane season of year 2004 in the US
• Hurricane Katrina and Rita in the year 2005
• Rising demand, which supply could not meet.
All of the above have played their role in the per-barrel price.
Some events have impacted more significantly than the others. The
net impact has been that the consumers of crude oil subject to any
one of several events that can influence the price. However, notable among the world events that have affected oil prices have been
the Gulf War II, 2005 Hurricane season, and Iran-US Nuclear tension. Although the 9/11 can be classified in this category, oil prices
167
Not only is the price of crude oil subject to composition of the
crude, but the price of crude oil is combination of the following
factors:
1. The price set by the producer nations
2. Continued high demand in the industrialized world
as seen in the increase in gas-guzzling vehicles such
as the SUV
3. Increased car ownership in developing world where
India and China are rapidly developing nations with
need for petroleum and petroleum products, and
4. A host of international factors such as the Second Gulf
War, and US-Iran tensions, to name only two of the
last category.
Each of these has contributed significantly to the price of crude
oil, and the United States, rightly or wrongly, has contributed to
almost all of the above issues with soaring demand, invading Iraq,
and raising tension with Iran.
Crude oil price has been hostage to the world events. Also,
production cuts or restoration by OPEC gravely impact the market
place. Since the year 2000, the following political events impacted
the oil prices:
• September 11 2001 attack the World Trade Center
• Gulf War II begins in early 2003
• Insurgency in Iraq (2003 to present)
• Iranian nuclear debacle started in 2005
• Russian entry into the world market from year 2000
onwards
• Hurricane season of year 2004 in the US
• Hurricane Katrina and Rita in the year 2005
• Rising demand, which supply could not meet.
All of the above have played their role in the per-barrel price.
Some events have impacted more significantly than the others. The
net impact has been that the consumers of crude oil subject to any
one of several events that can influence the price. However, notable among the world events that have affected oil prices have been
the Gulf War II, 2005 Hurricane season, and Iran-US Nuclear tension. Although the 9/11 can be classified in this category, oil prices