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Oil: More than Just a Price - ASHARQ AL-AWSAT English Archive
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Once again, the price of oil has decreased and continues to drop to new levels quickly and continuously. Clearly, the primary reason for this change is the positive and peaceful activities and negotiations between the USA and Iran after the US administration appointed an envoy from the US Department of State to partake in talks with the Iranian government and its proposal to open a US diplomatic office in Tehran.

Yet there is another important reason behind the decrease in oil prices and the results of this have begun to manifest through figures; namely the sharp and conspicuous decline in fuel consumption levels in America as a result of oil-saving programs by reducing travel and bringing together the largest possible number of passengers to share the same method of transport. They also aim to reduce the use of cooling and heating systems.

All of this momentum is expected to transform into policies and legislations in the pure interests of “American national security” itself. However, there are remarkable economic groups and emerging financial institutions that are investing in the promising sector of alternative energy, a sector that many have compared to the digital “dot-com” sector that thrived and grew in the 1990s.

It is expected that a lot of capital will be made available to this sector in search of strong investment opportunities as there are many hopeful projects. For example, as well as using soy and corn as an alternative to fuel for cars, there is another important project that involves forming plastic from vegetable and fruit fibers. There is also significant progress in the fields of both solar energy and wind power and of course, there has been a lot of talk about hydrogen- and water-powered cars.

There are concerns that oil will become so exorbitant that it will lose its worth as the case was with coal, for example. Coal is put through a process of production, development and “washing” and in South Africa, for instance, there is an important venture to make oil from coal and this hasn’t even taken place in China, one of the world’s largest coal producers.

There is a hidden conflict taking place, though it has become increasingly apparent, between the oil-producing countries (especially the main producers) and the countries, bodies and institutions concerned with alternative energy sources especially since there is a strong media drive to incriminate oil and burden it with climate change, other environmental issues and the global warming disaster.

Today’s fluctuation in oil prices per barrel, in reality, is more than just an economic issue related to supply and demand; it could indicate a new consumer trend amongst the population with regards to the option of future energy. Undoubtedly there are numerous signs that indicate that the people’s “choice” will have ramifications on many sectors but there is nothing to support that unless we remember the effects of steam power, coal and then oil energy on human lives and the economy.

How long until the age of oil draws to an end? We will not find the answer in the oil wells or reserves or in international stock markets; the answer, perhaps, lies in scientific laboratories and political legislations.

Hussein Shobokshi

Hussein Shobokshi

Hussein Shobokshi is a businessman and prominent columnist. Mr. Shobokshi hosts the weekly current affairs program Al-Takreer on Al-Arabiya, and in 1995 he was chosen as one of the "Global Leaders for Tomorrow" by the World Economic Forum. He received his BA in Political Science and Management from the University of Tulsa.

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