The doubling of crude prices to $ 140 a barrel within a year, and with no signs of easing in the near future has serious ramifications for most of the non OPEC countries, as it threatens to derail their development process
totally. Notwithstanding the pronouncements of the OPEC, regarding the expected price levels of $170 dollars or more in the near future, and its inability or otherwise to firm up an action plan to arrest the price rise, coupled with the escalting tensions between Iran and Isreal, the fact of
the matter remains that there is a reasonable level of optimism for the oil prices to cool down substantially latest by the year end.
For one, OPEC itself would stand to lose if its major customers are forced to cut down the demand of oil, and instead give a fresh impetus to the development of non conventional sources of energy in collaboraton with each other. Certainly, such kind of a development would ultimately be detrimental to OPEC itself in the long run.
And secondly, being an election year in the US, it will ensure that the oil prices are reigned sooner than expected, going by its moves to control the spectulation in oil futures at its commodity exchanges. And most
importantly, all attempts would be made to defuse the tensions with Iran, and certainly, Israel would not be allowed to launch a military offensive as it would only worsen the oil crisis, which in turn would harm the
fortunes of the Republicans in the coming elections. Witness the friendly overtures being made to North Korea by the US, as precusor for such things to come.
