Global Oil Crisis

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Whenever we talk about world energy source issues, everyone shows concern because the oil prices are increasing all the time. In addition, energy sources are depleting and will be exhausted one day. This phenomenon is called “the global oil crisis”. According to a theory by King (1956), all nations around the world will face an oil production crisis following a bell shaped curve based on the limits of exploitability and market pressure. Of course, not every nation will be faced with “Peak Oil”, it is based on the individual nation’s perspective and calculation of understanding peak oil. There are three main contributing factors that have caused this current global oil crisis: political instability, market pressure and the depletion of natural resources.

Crude oil is one of the fundamental energy sources used by man. Oil is the main energy source to run the daily transportation, factories and make electricity. In view of this, energy sources have a worldwide demand in the global market. Every nation’s lifestyle and economy is still dependent on exports as a source of revenue. To influence the price of crude oil and get rid of unnecessary fluctuations in the international market, one of the international organizations was form which is calling OPEC (Organization of Petroleum Exporting Countries). OPEC is alliance of thirteen nations that control over fifty percent of the world oil and natural gas export. OPEC members are Iran, Iraq, Kuwait, Saudi Arabia, Venezuela, Algeria, Indonesia, Qatar, Nigeria, Libya, United Arab Emirates, Angola and Ecuador. Therefore, OPEC has a strong influence on the international market, especially when it makes a decision either to reduce or increase its oil production in the oil market.

Political instability is one of the causes of the oil prices increasing in the global market. Political in nations producing oil country play an important role to influence the global oil market, success or failure in the relationship between...
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