The Impact of Oil Prices on the International Economy
The international economy and financial markets react to changes in the oil industry, which bodes poorly for them when the value of oil reaches a hundred dollars per barrel. Market experts predict costs of between ninety and a hundred dollars by the time the year ends. An analyst commented that when prices increase to a hundred dollars, the demand for oil would subside, with PetroMatrix adding that transpiring economies' growth would suffer since steep prices lead to inflationary pressures that raise interest rates (Vaughan, 2018). Nations will have to remove oil taxes, thereby broadening budget deficits. Recently, crude costs increased as it became apparent that key oil manufacturers do not intend to raise their output levels. Observers anticipate a continuous increase in prices, mainly because of worries over the effects of American penalties on oil exports from Iran as from November 2018.
The Influence of Electric Cars on Oil Prices
The current state of events began after American President, Donald Trump, decided to take issue with the Middle-Eastern country's status as a nuclear power. This move led to a decrease in Iranian oil exports, which is notable since Iran produces about four percent of international oil distributions or around two million barrels every day. The existence of a hundred-dollar barrel will coexist with the introduction of electric cars in rich countries and remains an attractive outcome for many people. There are approximately 114 electric vehicles, hydrogen cars, and plug-in hybrid variants in the United Kingdom. These cars could lead to less usage of combustion engines, potentially forcing the prices of oil to fall. Many countries already promised to help solve these issues with little success, although there was a time when main oil producers met to discuss how to curb the prices by increasing production. Considering concerns in other fields such as environmental awareness, it appears that the hundred-dollar barrel crisis may remain unresolved in the immediate future.
References
Vaughan, A. (2018). Rising oil prices fuel fears of damage to the global economy. The Guardian.
