[peakeco]

what do you all think are the reasons behind oil price shocks, as experienced the in 70's and also recently. We know high energy prices means economic recession etc. What is behind the increase in oil prices? Engdahl argued the 70's shocks were orchestrated by the west to benefit the banks, the currency, the oil companies, etc. He doesnt seem to think that is the reason today, he says its speculation...So im not sure if another thread exists but the real reasons behind price hikes in history i would think would make an important topic for a thread.

So peak oilers what was the reason behind the price shocks of the 70s?

[Tyler_JC]

what do you all think are the reasons behind oil price shocks, as experienced the in 70's and also recently. We know high energy prices means economic recession etc. What is behind the increase in oil prices? Engdahl argued the 70's shocks were orchestrated by the west to benefit the banks, the currency, the oil companies, etc. He doesnt seem to think that is the reason today, he says its speculation...So im not sure if another thread exists but the real reasons behind price hikes in history i would think would make an important topic for a thread.

So peak oilers what was the reason behind the price shocks of the 70s?

October 1973 Yom Kippur War. US aids Israel. Arab members of OPEC get pissed off and embargo the US and its allies. Oil prices shoot up.

Pretty straight forward, if you ask me.

http://en.wikipedia.org/wiki/1973_oil_crisis

[AAA]

You need to read The Prize.

It will answer all your questions.

[aahala2]

what do you all think are the reasons behind oil price shocks, as experienced the in 70's and also recently. We know high energy prices means economic recession etc. What is behind the increase in oil prices? Engdahl argued the 70's shocks were orchestrated by the west to benefit the banks, the currency, the oil companies, etc. He doesnt seem to think that is the reason today, he says its speculation...So im not sure if another thread exists but the real reasons behind price hikes in history i would think would make an important topic for a thread.

So peak oilers what was the reason behind the price shocks of the 70s?

The late 70's the largest reason was the Iran-Iraq war. Production
in those countries dropped on the order of 5-7 million barrels a
day and while some of this decease was quickly returned to normal
a considerable portion never did.

In the present period, while some of the price increase was due
to the supply/demand situation, the larger reason was price
speculation. It's simply not reasonable to explain how a 2-4% drop in demand equal a 70% decline in price in a matter of a few months without speculation as the main cause.

[mos6507]

Enter someone blaming peak oil for the credit crisis in 3, 2, 1....

[peakeco]

ok so the west would leave the pricing of the worlds most important commodity in the hands of...hmm.

none of you question that idea? Some have argued that the oil shocks of the 70s and the ensuing third world debt crisis were quite deliberate.

[Tyler_JC]

ok so the west would leave the pricing of the worlds most important commodity in the hands of...hmm.

none of you question that idea? Some have argued that the oil shocks of the 70s and the ensuing third world debt crisis were quite deliberate.

Do you understand how oil is priced?

The price of oil is set by traders, not governments. The West was unable to set the price of oil after they could no longer control the supply of oil.

When America was the largest oil producer, it could act like OPEC. When American oil production peaked, we could no longer increase supply to meet increasing demand. We relied on imports.

The oil that was sold to the US largely came from the Middle Eastern oil producers of OPEC. They restricted supply to punish the US after the Yom Kippur War. It worked like a charm. The ME got rich and the US suffered a decade of economic malaise.

[peakeco]

The West was unable to set the price of oil after they could no longer control the supply of oil.

Considering the US props up and supports these 'nations' maybe the US also plays a role in controlling their production and hence world supply. After all we're talking about the availability and so price of the worlds most important commodity. If thats not vital to US national security interests, what is?

The ME got rich and the US suffered a decade of economic malaise.

The ME's profits were recycled back to US banks, while many of the citizens of the ME and other oil producing countries live in 3rd world conditions.

The US may have suffered from the high inflation/interest rates of the 70s, but the world was crippled (ie, third world debt crisis). Nonetheless, the US/UK reimposed its dominance in financial affairs. The dollar, anglo-saxon banks, and their oil companies, they were the real winners.

If anyone reading this takes anything away from this post, I hope its this: oil prices are determinants of world growth and can cause nations to flourish or wither away. The pricing of this commodity is far more complicated (and obscure) then most peak oilers believe).