Kjell Aleklett: Newsweek and

Newsweek

That higher prices affect consumption can be seen most clearly in the USA where consumption of oil was highest at the beginning of 2007 after which it began to decline. But the decline was not sufficient so that, ultimately, the doubling of the price to the consumer was too much for our unstable economic system to tolerate. Some consumers could not manage the increased energy prices, the higher food prices and the higher costs for accommodation. The rest of the world was not affected as severely because the value of US dollar fell and many other nations had higher energy taxes. But like a snowball that begins rolling high up and becomes larger and larger, the problems in the American economy accelerated until they dragged the rest of the world down with them. It is interesting to note that the crash now and in 1979 came when the cost of oil exceeded 7% of global GDP.

During the last 10 years we have consumed 300 billion barrels of oil and that oil is gone forever. If it had been copper, iron or some other metal that we had used then the possibility of recycling would have existed. But oil cannot be recycled. Although the economy has crashed and steel production has fallen by 40%, oil consumption has fallen by only 3%. When idling, the world