Nigeria: A Dozen Paradoxes of the $100 Per Barrel of Oil

The surging price of oil, from just over $10 a barrel a decade ago to $100 last week alters some orders hitherto considered moral or axiomatic.

It changes the wealth and influence of nations and industries around the world. It has much more implications for producers, as well as importing nations. The following are perceived changes brought about by the unprecedented price regime in the global oil economy.
Oil price peaked at 100.09 dollars last Thursday after the US government said oil reserves fell by four million barrels. Light, sweet crude, for which the countries of the Gulf of Guinea are famous, had stood at 99.32 dollars a barrel in Asian trading on the New York Mercantile Exchange. While the global market feels the impact, the circumstances that led to the meteoric surge are antithetic to the growing quest to stem the tide of expanded price of oil under the liberalization of the world economy. Further ironic is this projection as it stands the logic of economic law of demand and supply. Oil is the most sought after product in the world today. It provides energy needs for manufacturing nations, wealth for producing nations and has been the major cause of conflict around the world. So common sense dictates that those who own this resource would exercise a modicum of control over it. This growing costs may ease back this year as the world’s economy slows, dampening demand. In London, Brent crude rose 32 cents to 97.92 dollars a barrel.

Paradox 1: Climate

The first major paradox is the fight against global warming through the aviation and manufacturing activities. Surging oil prices are a mixed blessing for the environment, experts say. Clean renewable energy and recycling are getting a major boost from a $100 barrel crude – but so are coal, a massive contributor to global warming, and nuclear power, which remains shadowed by safety concerns. The price of oil remained in sight of its record high after breaching 100 US dollars a barrel for the first time. Costly oil already is forcing sweeping changes in the airline and auto sectors. It is intensifying the politics of climate change and adding urgency to the search both for fresh sources of crude and for oil alternatives once deemed fringe. Steep gasoline prices also threaten America’s long love affair with the automobile, while putting strains on many lower-income people outside big cities who must spend an increasing share of their budgets just on fuel to get to work. The International Energy Agency said the $100 a barrel should remind consuming countries of the need to improve fuel efficiency.

11 more paradoxes at AllAfrica