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Oil crisis from the 1960s to till date
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Oil crisis from the 1960s to till date

Oil, Petroleum, and gas were the most needed renewable resources since inventions and modern technologies began using them. Generally, a lot of people pretending that, only demand and supply are the two major calamities which were responsible for the upturn and recessions of Oil prices.

As demand for Brent crude oil increases when the consumption of Oil increases to balance the demand the production and supply must be made high. Although if the case is true, if we look deep into this issue there were one more major calamity being responsible for the drastic change in oil prices which is OPEC.

What is OPEC?

Organization of Petroleum Exporting Countries abbreviated OPEC is a cartel of Oil producing countries which established in the year 1960. This group of countries produces approximately 40% of the world’s total crude oil production. Over a period of 7 decades the world has faced a lot of upturns and recessions in the price of oil, out of which the most popular crude oil price changes took place on 1974, 2000, 2014 and more.

In 1973, the production of Oil reached its maximum which led to the drastic upturn in the price of oils from $5.4 to $17 per barrel in 1974. Following to that, in yearly 2000 due to establishment of large number of industries which were dependent over Brent crude oil, this increased the demand for oil which drastically uplifted the price of oil per barrel and led to energy crisis in 2000.

Similarly, the upcoming years progressively faced these sorts of issues due to imbalance between demand and supply for various causes like technological innovations, Economic growth, relative price of oil substitutes, cost of changing in oil substitutes, Changes in energy policies, behavioural change by consumers and a lot more.

Reason behind drives of Oil prices 2021

As we have mentioned earlier, the increase in oil price had never felt a huge down fall since 1960 say a statistical report. Every time the price of Brent crude oil largely upturns post a small recession in the price. At present, post the outbreak of Covid-19 in 2020 many of the countries had set up lockdown which reduced the demand for oils this in turn increased the price of Brent crude oil in Asian trade on this Monday.

The price of Brent crude oil increases to 0.1 percent of the preceding value that is, $68.79 per barrel by 0038 GMT. U.S West Texas Intermediate Crude has revised the price of oil to 0.2 percent of the preceding value that is, $66.45 a barrel. The OPEC countries will have a meet on Tuesday to decide on supplies till July. The next quarter half of the year will face a huge price change for Brent crude oil.

“We see demand outstripping supply in the order of 650,000 barrels per day and 950,000 bpd in Q3 and Q4 respectively," ANZ analysts said, adding that this includes 500,000 bpd of increase in Iranian output.

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