The Report Of Oil

2262 words - 9 pages

Oil this dark thing is one of the world's most valuable sources of energy. It is called "black gold". This essay will discuss the importance of oil to the national economy and world economy. This text will show an in-depth description about how the oil influences the economy. The emphasis in the text is on understanding the supply and demand theory to explain this questions appropriately. Oils are extremely useful for our daily activities, but extracting and using oils has a damaging effect on the environment and also if we are not careful, oil will soon become rare and very expensive. This essay will also talk about environmental and ethical aspects of use of oil. Besides, the substitutions of oils are important to human.Background Oil plays an important part in our lives. Many million of years ago, oil comes from the remains if tiny water plants and animals. When there organisms die, they settle in the land and are slowly buried by mud and sand. After million of years, the oil was formed (Mercer, 2003: 14). As we know, oil is one if the world's most valuable resources and our most necessary source of energy. The oil processed into petrol, diesel and other important things. Without the oil, millions of trucks, planes, cars, power station, furnaces heating systems and so on will stop work. Human life will back to remote antiquity. The oil also is a raw material for plastics, paint and countless other products (Parker, 2002:5). It plays an important part in our lives. It dominates our modern world. However, the oil is fossil fuels and it is not renewable. We consume them fast but they are not being replaced. If we keep using oil at today's rates, the oil may run out in perhaps less than 60 years (Parker, 2002:6). So where is the oil in the world? As we know now, half of the countries were discovered the oil in the world. However, many of there stores are small. The biggest oil fields are in the Middle East, Russian and some Africa countries.Is the oil crucial for world economy?The oil business dominates our modern world and we mostly use mineral oil to run our industries and vehicles. Without oil the world economy of today would be brought to a halt. It is therefore more interesting to analyze what will happen if the supply of oil is significant reduced. From 1973 to 1974, the organization of petroleum exporting countries (OPEC) put up the oil price from 3 dollar to 12 dollar per barrel. In 1979, the price rose to over 30 dollar and in the 1980s the price fluctuated but the trend was downward (Sloman, 1997: 72). The OPEC raised the price from p1 to p2. (E.g. see the figure 1) Changes in oil price have been associated with development in the world economy, and are often see as begin for inflation or recession. Because of the significant increase in oil price from 1973 to 1979, the world economy went into recession. According to recent International Energy Agency analyze that high oil price has negative impact on world economy. If there is an...

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