Energy education: Could the price of oil generate inflation and push oil supplies into the danger zone?

in Education8 months ago

image.png
Image source

The price of oil is dragging down an economy that is binding with everything that is necessary for humanity, perhaps we have seen this behavior since the first dawn of what has meant the era of fossil fuels.

Certainly there is widespread concern about the supply of oil based on some analyses that explain that the situation in which a scenario with an inflationary trend is envisioned is not an issue to be taken lightly, as it is far from being seen as a transitory situation.

Rather than being an accurate or hasty analysis, it is what, together with other factors, has triggered a scenario where oil supply and price inflation are plummeting and deteriorating.

Forecasts that Brent crude will reach and exceed $100 this year sound much more plausible now than they did in November. The supply issue is in the spotlight, as most OPEC+ members appear to be struggling to meet allocated production quotas.

The warnings made under the scenario where the price of oil exceeds dollars per barrel is a situation that now ceases to be more of a warning to be a reality, we now see how the global oil supply is in the crosshairs of the entire global energy environment, The reason for all this is that the largest oil market (OPEC) does not seem to be at the productive level of being able to develop a volume of oil supply that is up to the world demand, a situation that makes OPEC is continuously struggling to reach or even exceed the production quotas that they themselves have established due to the demand of its main consumers.

image.png
Image source

There are a series of additional factors that place the oil supply at risk and in a danger zone, which is nothing more than the war conflicts that are currently underway, the conflict between Russia and Ukraine added to the one that is receiving the United Arab Emirates can make oil prices reach or exceed $ 100 per barrel, however given that these prices may rise by variable or external agents to a healthy relationship between supply and demand, it can cause an inflation of these prices that are not the real prices under a healthy environment and without war conflicts to develop.

The worst scenario that can occur is that the economy of highly consuming countries is not prepared to buy oil at possible inflationary prices, thus inflating the prices of other products worldwide.

All this economic scenario associated with oil prices, lead me to think that a rise in oil prices lowered the current situations where we see how OPEC will not be able to meet the demand of its main customers and coupled with a war environment between Russia and Ukraine and the attacks on the United Arab Emirates can trigger an inflation not only to oil prices but also to other products of the major economies that have to buy such oil with the possible characteristics in inflationary prices.

Sort:  


The rewards earned on this comment will go directly to the person sharing the post on Twitter as long as they are registered with @poshtoken. Sign up at https://hiveposh.com.

I really pity my country, nigeria.
One of the best and biggest oil producers in the world, but we are still importing.

Result of bad governance.