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With U.S. sanctions having successfully reduced Iranian oil exports to near-zero, one might think that the Islamic Republic would be on the brink of collapse. The reality, however, is that Iran has managed to build alliances across the Middle East that can be seen as a real coup in its geopolitical struggle against Saudi Arabia and the U.S.
The oil price is not only relevant for insiders in the oil industry. It is important for the entire economy; politicians and central banks keep their eye on it. But how is the price of oil actually determined?
Like every price, the price of oil is a result of the interplay between supply and demand. Plus, there is the economic environment which can lead to longer-term changes.
An overview of the key factors:
The supply
There are different oil grades and countries where these are pr
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Global Energy Advisory – 7th August 2019
Smoke and Mirrors in the Strait of Hormuz
Iran has seized another ship in the Persian Gulf. That makes three such seizures in a month. Iran claims the ship was smuggling fuel to Arab states, and was suggesting that the tanker was Iraqi, which Baghdad denies. Seven crew members were on board, and are now detained, according to Iranian news agencies. In all likelihood, the small vessel was, indeed, smuggling fuel, but Iran is interested presently in
Why is oil priced and traded in U.S. dollars?
Why is oil priced and traded in U.S. dollars?
Oil is priced in dollars because through Bretton Woods the dollar was pegged to gold and everything else was essentially pegged or floated to the dollar. The world was flooded with dollars after WWII which partially led to the present American consumerism, but it also enabled the world to essentially use the dollar as they would gold. Reserves soon played a role and in order to maintain stability the
World Oil Market Outlook in Year 2019
There is no peace in the oil .
During the three months from October to December at last year, North Sea Brent oil prices fell 40% down from $86 to $ 50, and then, in just two weeks, on the eleventh day of the New Year , move up to $61.
Such sharp fluctuations indicative of significant developments awaiting the international economy in particular in the global oil market
These fluctuations first raised questions about the reasons for the oil price rise
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About this blog
What determines oil prices?
Entries in this blog
The price of oil: How is it determined?
Oil is easier to sell than potatoes on a street corner
