Oil and Gas Prices Essay Example | Topics and Well Written Essays - 1500 words

Oil and Gas Prices - Essay Example History has been riddled with many incidents of oil price increases due to conflicts and fighting between and among countries. Emily Witten (2008) documents the history of oil price increase and is hereinafter summarized. In the 1970s, oil price increased to as much as $46 a barrel when the OPEC imposed an embargo on the U.S. and its allies for the latter’s support of Israel in the Yom Kippur War. In order to keep up the high prices of oil, the OPEC even decreased oil production. In 1978, when the Shah of Iran was deposed from power and a radical Islamic government was installed, oil prices rose to $42. In the 1980s, oil prices decreased as many Western countries made an effort towards conservation, however, these efforts were thwarted when Iraq invaded Iran and oil prices rose to $86 per barrel. Following the September 11 terrorist attacks in the United States, oil prices increased from $21 to $26. The U.S. invasion of Iraq in 2003 sparked another increase in oil prices from $32 in 2004 to $60 in 2006. Interspersed in these oil price increases were efforts towards conservation and peace which noticeably settled or decreased oil prices. However, the trend became clear, whenever there were conflicts between nations, oil prices went up. In the case of Colombia, oil facilities have been under constant threat of attack by guerilla groups in the region. Attacks on oil installations and civil conflicts in the region have made oil-importing countries like the United States concerned about oil supplies. These oil importing countries opined that â€Å"attacks on energy infrastructure in Colombia, and especially the implications of Colombian instability for the broader energy-rich Andean region, pose a threat to a key source of oil supplies† (Dunning & Wirpsa, 2004). These conflicts, in the light of the September 11 attacks on American soil gave license to the US to