The world’s eyes will soon be on the OPEC summit in Osaka. There is deep concern, particularly with the backdrop of a US war on Iraq. There are people who like to believe that the continuing war on terror is only a cover to seize the world’s major oil sources. Whatever the contradictory views held by politicians, the fact remains that oil plays a vital role in the contemporary economy. A sharp rise or fall in oil prices wreaks havoc in the calculations of economic planners as well as all others.
A price above $40 per barrel spells trouble for the economies of all oil importing countries. It has already been shown beyond doubt that abnormally high prices for a long period produce serious problems for the exporting countries as well. A sharp fall in the prices will empty the exporters’ coffers throwing people who are dependent upon oil into financial confusion and poverty.
In short, it is damaging to both oil exporters and importers if the price moves much beyond the $22-$28 range per barrel fixed by OPEC. The arguments of extremists on both sides lack reason and logic. There are Arab extremists who demand that oil be used as a strategic weapon against countries which refuse to toe the Arab line; there are Western extremists who demand steps to ensure maximum production with scant regard for negative influences on oil-producing economies.
Further, any move to cut off oil supplies would possibly lead to political and economic intervention by major oil importers. Seven industrial countries consume most of the international oil production. Halting oil supplies will produce no good. Under the circumstances the best option would be to keep oil out of politics. The importance of oil will increase when the demand for it increases.
