Continuing the analyis on oil, which seems to be the hot topic of the world today, I thought of an old story of the farmer and the hen who laid golden eggs. The farmer got greedy and wanted to become rich overnight. He wanted all the gold eggs in one day. So as the story goes, he killed the hen and found that there is only one golden egg. The moral of the story - do not kill the customer on whom your existence depends.
It applies to oil as well. The farmer in this case are the OPEC countries ( Saudi, Iraq etc), the hen, no doubt is the US. High oil prices will kill the US, as recession steps in. So the farmer will also perish then.
The 'farmers' of the world know this very well. They will ensure prices comes down, so that they have jolly good lives, as well ...till eternity I suppose!!!
3 comments:
As I understand US has massive unexplored oil reserve. The vastness of oil resource is sufficient for meeting their requirement of forthcoming few decades. Is it necessary for that country to depend on OPEC countries for crude oil? Or is it as per agreement they have to depend on them? How the world economy will change in case they stop using OPEC oil and start exploring their own reserve? Can you please throw some light on this issue.
Hello HR,
I was out of blogging for sometime now!!! hence the delayed response. You are correct, the US has reserves for itself for a long time to come. But they do not want to use them. They want to use the reosurces of OPEC nations,first. It takes time to build the refining capacity. If some day, they start to use it, the OPEC nations, control over oil trade will end.
Thanks a lot...
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