PER 2015
and ever-dying manufacturing, which led to numerous sanctions and exclusion from the EU summit. Further, Russia lost its influence over the Middle East due to its economic problems and the appearance of the Islamic State, which was seen from their weak position over Syria. With the breakeven point being much higher than America or Saudi Arabia, Russia desperately need the oil price to rise. Thus far from its original aims, Russia lost many after the co-incidence of high oil price, which he used to boost recovery and restore national confidence. To conclude, I think that the recent drop in the oil price can be explained through 3 factors: the first being Saudi Arabia’s policy (although officially OPEC she has the most say) to not cut the supply, recent joining of Iran, who contributes significantly to the global supply from its stabilisation, to OPEC and finally a slight increase in the demand from global recovery. References and further reading: http://oil-price.net/en/articles/partial-lift-of-crude-oil-export-ban.php http://www.bbc.co.uk/news/business-29594761 Sunny Chen When crude oil fields were first discovered and exploited in ancient Babylon for construction of walls four thousand years ago, few can imagine how important it would become. We can see petrol fuelling our cars every day, but oil is undoubtedly far more useful than that. It is a major raw material for the production in key industries in the economy, ranging from production of mobile phones, food to military maintenances. Two-third of world GNP is made by oil. Without oil, the economy would collapse for any countries; it is as simple as that. Oil exerts great influence on geopolitics and national economy. For those oil-exporting countries, control of oil exports means power in international relations, government income either through profits of state-owned oil companies, or tax intake of private ones, therefore it usually results in rapid improvements in living standards of their citizens, though the quality of government can make things vary a lot. In the last century we have seen Saudi Arabia from a remote insurgent in the Ottoman Empire to one of the richest nations outside Europe and North America, as well as a decisive power in the Middle East and around the world. We have also seen the rapid economic growth and increase of welfare spending of the USSR in the 1970s when oil price rocketed as a result of the Arab-Israeli conflicts, and the failure of shock therapy when oil price was frighteningly low in the 1990s for president Yeltsin. And, most essentially, the foundation of OPEC (Organisation for Oil Exporting Countries), which was primarily to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers, as these member countries were mostly former European colonies and oil fields used to be controlled by western corporations. Since last year, however, we have seen the oil price shaking the world again. The Brent crude oil has fallen from $115 per barrel to less than $50 in January this year. Despite many predictions the oil Is the falling oil price reshaping the world economy?
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