Question

What most likely caused the steady increase in price per barrel of oil between 2001 and 2008?

Answer 1

Likely reasons for the steady increase in price, per barrel of oil for the period 2001 – 2008 are as follows:

• China’s increasing demand for oil.

• Israel – Lebanon conflict, Iran’s nuclear program etc.

• Financial speculations.

• Dip in US Dollar value.

• Worries over decline in oil reserves in the world.

In 2003, the price per barrel of oil was $30. It doubled in 2005 and reached up to $147 in 2008.