Skip to 0 minutes and 5 secondsA bit of history. Back in the 1960s, the oil price was very rarely higher than $4 or $5 a barrel. In the 1970s, it at one stage tripled and a few years later, it quadrupled. Now by the way, there's a slight footnote here. That is, as I said earlier in this course, we look at shell and started using scenarios to try to anticipate the possibility of a rising oil price and the impact on them. Then as the oil price rose to a certain level, it obviously had major impacts, amongst others, on global inflation. And that heralded a period of much higher interest rates all over the world.
Skip to 0 minutes and 48 secondsIf we fast forward to the early 2000s, the oil price was muddling along at $35 to $40 a barrel until late 2007, early 2008, when the oil price shot up to at one stage $147 a barrel, after having been oh, not much higher than $60 a barrel for so many years. This again heralded a brand-new era in the world of energy. One of the implications of that was that suddenly natural gas, also known as shell gas, became a far-more feasible option. And so we found the next couple of years, especially in America, that natural gas production escalated. So much so, that by 2014, America had become not an energy importer, but an energy exporter.
Skip to 1 minute and 42 secondsThe oil price started falling in reaction to that. In late 2014, we saw a rather dramatic decrease. And by the middle of 2015, the oil price was back down to to barely $50 a barrel. Now, this is a major change. And again we ask, what are the implications? It depends who's asking and answering the question. If the country is an energy oil importer, the decline in the oil price is wonderful news. If however, a country might be a major energy producer, the drop in the oil price is terrible news. And that includes one or two countries in Africa, which had become renowned as big oil producers, such a Nigeria, such as Angola.
Skip to 2 minutes and 25 secondsFurthermore, it's telling us something else, and that is possibly, with a much lower oil price, natural gas production might also become less attractive, less economically feasible. And then, the possibility-- and we'll have to see what happens-- is that with the slow down in production of natural gas, we might actually see a rising price of oil. And so one could imagine that as the years and decades go by, we'll see these constant cycles, constant price cycles, regarding oil. One of the most important messages is of this whole story is, that what's good for some might be less good for others, and of course, vice versa. [PLAYING MUSIC]
Rapid oil changes
To this day, oil still remains the most important source of energy for both businesses as well as individuals. It would be a good idea to do some research on oil prices and establish some of the reasons for the dramatic changes as well as what impact this has on society before watching the next video.