One man's oil price, is another man's....

The discovery of oil could be regarded in the same breath as the discovery of fire, electricity or nuclear technology, but none of these human revelations has created the division and conflict that the black gold has inflicted on the world. Oil has fed greed the world over, led to countless wars and set in motion a potentially unstoppable environmental catastrophe. Without oil our standards of living might not be as high and access to essentials may not be as instantaneous, but we could have adapted. Oil has enabled transportation to move at what would have seemed galactic pace only a few hundred years ago, but do we need to get across the globe in such a short space of time. Electrical communications may make physical communication - that is actual travel - irrelevant one day. Oil has been responsible for creating the world as it is, but would an alternative world been worse? It's debatable. So oil has achieved short term gratification but long term damage.

In 1973 the West's reliance of oil for the first time was laid bare. Finally the Achilles heal had been exposed. And this was only after a limited one month embargo and a price increase to a mere $11.65 per barrel. But the West managed to tame the Saudis and consequently OPEC through weapons and various other backhanders and oil prices stabilised (although they increased to $30-40 per barrel for much of the 1980s and 1990s), allowing sustained growth. But this Achilles heal is laid bare once more. The Middle East is floating on immense oil revenues, it is an architects paradise and is now providing finance back to its customers just to reiterate its economic clout. So for this part of the world, higher oil prices mean even greater wealth. And to rub it, petrol prices in the Middle East are decreasing.

Oil is a finite resource, so unless the Middle East diversifies (which it is doing through education, finance and science), it will be washed up in a century. Likewise, but more immediately, the West needs to wake up to the reality of a limited resource and shift its economy to non-petroleum reliance. Predictably this has been left too late, so now it will only be achieved the hard way and may well lead to violence, social unrest, etc. Now the West are not the only consumers, India and China, with a combined population closing on the 3 billion mark, are radically altering the market.