A war, your daily ride and oil prices
What are the relation between war, your daily ride to work, and the prices of your favorite meal at your local restaurant?
Crude oil prices are behind everything, influencing prices, destabilizing governments, putting nations in conflict.
In our previous 50 years of history, the word oil was behind the Iran-Iraq war, the Kuwait invasion, conflicts in Africa and Latin America.
Furthermore, in this present moment where every democracy on this planet is talking about sustainability and energy transition, we remain using 90,7% [1] of non-sustainable sources.
Shifting from our old diesel motor-powered cars to modern electrical ones, replacing our light bulbs and heating systems won’t be enough if the generation of electricity remained tightened with coal and oil.
In 2019, 58,8% of the electricity generated in Italy was produced from non-sustainable sources. Shift country’s energetic source wasn’t as simple as buying a new phone or car.
It’s important to highlight that this is not an exclusive Italian problem. Every developed nation is under a similar situation.
Oil: 50 years of trouble
It’s easy to describe how comfortable is to see your car tank full of gasoline. It’s a synonym of freedom.
Curiously, the journey of the combustible until it arrives at your car tank it’s full of stories. In many circumstances, crude oil comes from a distant country across oceans. While it’s on the vessel, financial entities buy and sell this oil several times as a monetary asset. [2]
This financial flow entangled with geopolitical interests shaped the history of oil prices. Looking at this timeline of costs and events is an opportunity to review our history.
Gulf and Iran — Iraq War, the Venezuelan crisis, and conflicts in Africa. There are so many social events associated with the supply and demand of oil. Is also interesting to observe recent events, such as the crash of 2008 and the COVID-19 Pandemic provoking important tremblings in the oil prices.
COVID-19 and Oil prices
On April 16th, 2020, amid a global pandemic, the financial market was shocked by the worst day at Oil prices since 1991. [3] On a single day, the oil plunged $10,15 of its price to a level of $31.13 per barrel of crude oil.
Part of the planet was in lockdown. From the day to the night combustible demand dropped significantly.
A month after that Thursday the oil prices returned to their level before the pandemic, influencing prices of food and services.
To sustain the prices, The Organization of the Petroleum Exporting Countries (OPEC) decided to cut its Oil production, as a result, the prices not just returned to its original level, but also generated pressure in gas, transportation, and food prices.
Energy consumption, sustainability, and social development
Historically, energy consumption is directed connected with the evolution level of society. Nowadays, every developed country is also a monstrous energy consumer.
Nevertheless, shifting from oil and other fossil-fuel combustibles to sustainable won’t be an effortless job. This transformation will have an impact on our global economy, geopolitics, and future historical occurrences.
This article was written as an assignment for the data journalism class from my Master’s course in communication and information technology at the University of Calabria.
[1]BP Statistical Review of World Energy (2020) — Available at: www.bp.com
[2]Ladislau Dowbor. (2018). A era do capital improdutivo : a nova arquitetura do poder, solo dominacao financeira, sequestro da democracia e destruicao do planeta (p. 108). Outras Palavras.
[3]Oil plunges 24% for worst day since 1991 — Available at: CNBC.com
Data sources:
Ministry of Ecological Transition: Average weekly prices of fuels — https://dgsaie.mise.gov.it/prezzi-settimanali-carburanti
https://dgsaie.mise.gov.it/open_data_export.php?export-id=5&export-type=csvx
Organization of the Petroleum Exporting Countries (OPEC) — https://www.opec.org/opec_web/en/data_graphs/40.htm
International Energy Agency — https://www.iea.org/fuels-and-technologies/fuel-economy
https://www.iea.org/reports/oil-market-report-december-2021
https://www.iea.org/data-and-statistics/charts/change-in-oecd-oil-production-by-main-producing-countries-2020
US Department of Energy — https://www.eia.gov/dnav/ng/hist/rngwhhdm.htm
The World Bank — https://datacatalog.worldbank.org/home
https://blogs.worldbank.org/opendata/crude-oil-excess-capacity
Crude Oil Prices — OECD — https://www.oecd-ilibrary.org/economics/oecd-factbook-2014/oil-prices_factbook-2014-48-en;jsessio
The database used to prepare this article is available for download on: https://www.amazon.com/clouddrive/share/6KXkwWVPCLy5GeQTemtvC4Z6odsHP2RDSVToqlJnmT7
Note: The information contained in this article is copyrighted by the institutions cited above.
