Any disruption in the supply of oil — which is essential to the effective functioning of the modern, global economy — has an immediate, often damaging effect on international trade and markets.
Not only does the resulting higher cost of oil often feed through to the price of other goods and services, but the volatility it causes on world markets is dangerously destabilising to the already fragile international economy.
Most frustrating to those companies and traders who are trying to build a business, rather than make a quick buck off speculation, is that the volatility in the oil price often has nothing to do with supply and demand, but is a result of political tension. The stand-off between Iran and the US and others over the Middle-Eastern country’s nuclear ambitions is but one example of this. Iranian and American sabre-rattling is seen as a threat to the flow of oil to world markets through the Strait of Hormuz.
No comments:
Post a Comment