Business and Finance

The Politics of Oil Prices, the Price of Oil Politics

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US$147/B One Year On: Political Winners and Strategic Losers
US$147/B One Year On: Political Winners and Strategic Losers

In 2009, the oil price fell sharply after a five-year honeymoon. You’d have expected it to take a number of political casualties with it. In a new analysis by the Center for Security Studies (CSS), Matthew Hulbert explains why it’s not been the case. Looking forward, he thinks that consumers will pretty likely face another price crunch as investment lags and demand rises. But he concludes with a warning to Russia, Venezuela and co:

“Some producers will no doubt see this as a ‘strategic victory’: but unless they have learned the lessons of 2008/9 to diversify their economic bases beyond narrow resource wealth, once the next bubble bursts, they will no doubt need to batten down the political hatches once more.”

Matthew is the CSS’s energy expert; he used to work in the City of London, advising on energy markets and political risk.

The paper is available for download here.

2 replies on “The Politics of Oil Prices, the Price of Oil Politics”

Politics and price are interesting, but we should be talking about geological peaks. The world will run out of oil one day and it will be messy when we do. I just hope it happens before we totally destroy the planet with carbon…

Interesting piece; I guess it tallies with the latest IEA forecasts on output reductions – ‘politics not price stupid’.

I do wonder though whether OPEC will be sitting even prettier in future if some of the more unstable non-OPEC producers go ‘off-line’. Time will tell.

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