Oil

Oil is important for our lives. Some countries rely on oil economically as their basic income; others, especially industrial countries, rely on it to make their products. So, the price of oil depends on supply and demand. J. Murray (July 1 2008), in “Oil: A global crisis”, says Iraq war makes the oil expensive and costs the world $6 trillion. In addition, Dr. Mamdouh Salameh, who is the oil economist, says the oil should be not more than $40. On the other hand, there is prediction that the price of the oil would be $200. Furthermore, in 2000 the government of Iraq offered to open 10 new giant fields to produce extra oil, and Saddam’s government produced 3.5 million barrels per day but these days the government of Iraq is producing 2 million barrels per day.

In my opinion, the oil price is acceptable.

First, Iraq war encourages the price to be high. As we know, Iraq is producing less than what it produced before. So there is low supply. In addition, the location of Iraq is very important not only for the USA, but also for the world, because it is close to the countries that are producing at least 20 million barrels per day.

Second, decreasing of supply makes the price high. Recently, all countries that produce oil have made a group to control the production. They named the group OPEC. So, they control the production to make the price as they want. In addition, most of these countries rely on oil as the basis of their income.

Third, increasing of demands makes the price high. These days, there are many new industrial countries such as China and India that demand a lot of oil. In addition, the demand for oil is increasing, even in the developed countries such as the USA. As we know, if the demand is more than the supply, that leads the price to be higher.

Based on the arguments above, Iraq war, supply and demand, the price of oil is acceptable at least in these days; but maybe the price would reach $400 dollars in the next three or four years.

Reference:

Murray, J. (2008, July 1), Oil: A global crisis. The Independent. Retrieved on July 1, 2008, from:

http://www. Independent.con.uk/envviroment/green-livilng/oil-a-global-crisis-765876.html.