168 PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
merged from that disastrous event almost unchanged. In fact, oil
demand dipped immediately after the 9/11 attack, resulting in a
production cut by OPEC.
The Gulf War II and the insurgency in Iraq cut off oil supply from
Iraq. This caused a shortage in supply and, hence, in a rise in price.
By the third quarter of 2005, the price of oil had increased to $45
a barrel. Later, this price increased further and then momentarily
stabilized at approximately $50 per barrel.
In the late summer of 2005, hurricanes Katrina and Rita, which hit
the Gulf Coast of the United States, had a substantial effect on the
price of oil. A number of oil refineries shut down and number of oil
production platforms damaged. Crude oil rose to $60 per barrel.
The Iran-US Nuclear tension created international tension as
peaceful means to ask the Iranians to cease and desist failed. The
decision of the Bush administration to invade Iraq made a military
option (involving a strike to cripple Iran's nuclear facilities) a distinct possibility. This, accompanied by the crippled production at
the US Gulf Coast and the management of supply to demand by
OPEC, started the further upward movement of oil prices.
6.3 Oil Price and Analysis
Crude oil is one of the main natural feedstocks used to meet energy
demands of mankind and price variation has a significant influence on the society development. The prognoses of the volume of
crude oil extraction globally and regionally, consumption rates, and
the crude oil price are used not only for planning the national and
world economies, but also for development of refining enterprise
investment programs.
Despite some prognoses for depletion of crude oil reserves in the
near future, the structure of energy consumption is not expected to
significantly change. A marginal reduction of the crude oil influence till 2030 (up to 32%) and equalization of the energy balance of
crude oil, natural gas and coal is expected up to the mid-point of
the 21st century.
One of the main advantages of the crude oil as an energy source
is its application in the transport sector where the oil-refined products are and keep on being without serious competition. As the
population around the globe becomes more mobile, as is currently
happening in India and China, the demand for liquid fuels in the
merged from that disastrous event almost unchanged. In fact, oil
demand dipped immediately after the 9/11 attack, resulting in a
production cut by OPEC.
The Gulf War II and the insurgency in Iraq cut off oil supply from
Iraq. This caused a shortage in supply and, hence, in a rise in price.
By the third quarter of 2005, the price of oil had increased to $45
a barrel. Later, this price increased further and then momentarily
stabilized at approximately $50 per barrel.
In the late summer of 2005, hurricanes Katrina and Rita, which hit
the Gulf Coast of the United States, had a substantial effect on the
price of oil. A number of oil refineries shut down and number of oil
production platforms damaged. Crude oil rose to $60 per barrel.
The Iran-US Nuclear tension created international tension as
peaceful means to ask the Iranians to cease and desist failed. The
decision of the Bush administration to invade Iraq made a military
option (involving a strike to cripple Iran's nuclear facilities) a distinct possibility. This, accompanied by the crippled production at
the US Gulf Coast and the management of supply to demand by
OPEC, started the further upward movement of oil prices.
6.3 Oil Price and Analysis
Crude oil is one of the main natural feedstocks used to meet energy
demands of mankind and price variation has a significant influence on the society development. The prognoses of the volume of
crude oil extraction globally and regionally, consumption rates, and
the crude oil price are used not only for planning the national and
world economies, but also for development of refining enterprise
investment programs.
Despite some prognoses for depletion of crude oil reserves in the
near future, the structure of energy consumption is not expected to
significantly change. A marginal reduction of the crude oil influence till 2030 (up to 32%) and equalization of the energy balance of
crude oil, natural gas and coal is expected up to the mid-point of
the 21st century.
One of the main advantages of the crude oil as an energy source
is its application in the transport sector where the oil-refined products are and keep on being without serious competition. As the
population around the globe becomes more mobile, as is currently
happening in India and China, the demand for liquid fuels in the