Oil isn’t just petrol for your car.
It’s an ingredient in a lot of what we use
from the plastic glove that keeps your hand clean
to the tires that keep you on the road.
Which means these products
can be affected by the fluctuating price of oil.
That price is largely decided by supply and demand
and the collective actions of an organization that provides 40% of the world’s oil – OPEC.
OPEC stands for the Organization of the Petroleum Exporting Countries.
It was formed in 1960
by founding members Iraq, Kuwait, Iran, Saudi Arabia and Venezuela.
伊拉克 科威特 伊朗 沙特阿拉伯和委内瑞拉组成
The group was created to monitor the stability and prices of the petroleum market,
which was previously determined by U.S. dominated multinational oil companies.
Currently OPEC member countries also include Algeria, Angola, Ecuador,
目前欧佩克成员国还包括阿尔及利亚 安哥拉 厄瓜多尔
Equatorial Guinea, Gabon, Libya, Nigeria, Qatar and the United Arab Emirates.
赤道几内亚 加蓬 利比亚 尼日利亚 卡塔尔以及阿拉伯联合酋长国
Today these oil producing member countries supply over 40% of the world’s crude oil production.
And together they control more than 80% of the world’s proven crude oil reserves.
OPEC’s oil and energy ministers meet twice a year in Vienna, Austria
where they collectively decide
whether to raise or lower oil output in order to maintain a stable market.
Critics argue that it’s a way for them to maintain the price they want.
But does OPEC actually control world oil?
The biggest consumers of oil are the U.S. and China.
It was China’s rapid development in the early 2000s
coupled with a lack of growth in the production of oil
which sent the price of oil shooting up.
In turn, those high prices
made it profitable for non-OPEC countries like the U.S. and Canada
to go after and discover harder to extract oil.
Because they weren’t bound by the cartel’s decisions
these countries have grown their levels of supply,
which meant OPEC’s market influence began to decline.
A rise in supply and a reduced demand for oil in Europe and Asia
led to the price of oil crashing.
This caused political problems in some OPEC countries like Venezuela
where oil is the chief driver of the economy.
It has the largest proven oil reserves in the world
but also the highest inflation rate on the planet.
But for most consumers,
the drop in the price of oil has meant cheaper fuel and lower energy costs.
Since 2016 however, oil prices have been steadily rising.
Later that year the Saudi-led OPEC members agreed
the first production cuts since 2008, a reduction of around one million barrels a day.
Crucially, Russia and 10 other non-members also agreed to pump less oil.
OPEC and its allies agreed to extend the cuts through to the end of 2018.
But in the U.S. there’s a shale oil boom.
Production levels recently hit a record high
and are predicted to surpass both Saudi Arabia and Russia.
But even with higher output levels,
the U.S. still imports roughly 300 million barrels of oil a month.
For the renewable energy industry, however, keeping oil supply high and steady makes it
然而 对于可再生能源行业来说 保持足量和稳定的石油供应
an attractive alternative and might be one of the most powerful tools to grow the sector.
But the price of oil remains volatile.
Geopolitical factors such as the Iran nuclear deal and President Trump threatening OPEC
could see the prices go up or down,
but in the end the forces of supply and demand would ultimately determine the price.
With more than 80% of the world’s proven oil reserves
OPEC in the 21century continues to be relevant
and their decisions can still affect the price of oil
if just temporarily.
But as new sources of energy gradually replace hydrocarbons,
the oil industry faces a race against time.
In the words of an ex-Saudi oil minister,
“The Stone Age did not end for lack of stone,
and the Oil Age will end long before the world runs out of oil.”
而石油时代 早在世界石油枯竭前 就将结束”
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Oil isn’t just petrol for your car.