OIL CRISIS MANAGEMENT(cost transfers)
IRAK-IRAN WAR
ARAB REVOLUTION
BUSINESS INNOVATION RESEARCH DEVELOPMENT
2 graphical simulations of crises impacting on the Oil price and
amplification mechanisms leading to a return to the stability of
the energy supplies and fixed price
Iran-Irak war and oil crisis management
Crisis productionNormal productionKOWEIT
IRAK
USA
S
D
Price of oil is low
Pressure to increase the oil price
Production Volumeunchanged
Cost = loss
S >> D
EQUILIBRIUM
IrakRequirements
USA Oil dependenciesOn Koweit foreign import
High Price oil
US Solutions(2012)+ Energy Act+ Strategy of diversification
ENVIRONMENTAL DAMAGES WHEN OIL FIELDS BURNED
Cost
Koweit invasion
Invasion of Irak
Invasion of Irak
US Solution (1990)
COST TRANSFER ANALYSISKoweit maintained Oil Volume Production to
avoid costs Costs were inevitable when Irak envaheded Koweit and
burned of the volumes of oil instead of redcuigng the production s
required by Irak
No high Price = No costs
IRAN
Irak endebted
Costs of war
GS RADJOU
(Source: judgement call)
P>0(Volume)
Arab (2011) revolution+ ...+ Syria+ Iran
P < 0(Volume)
Oil highprice
World commodity/oil Low Prices
Normal Volume of Production
P costs because not able to produce and the relative increase of
demand (S< D) leads to cost for world gas exploration
Arab revolutions and Oil crisis management:
Oil Relativedemand----> 2011, + 3%)
Oil Relative demand--> 2010, +1%
Cost=loss
Equilibrium
GS RADJOU
(Source :Surgutneftegas)
CONTACT CONCERNING THESE SLIDES(Still work in progress)
For a suggestion or a comments, Please, send a feed-back at:
Georges RADJOU, CEO, MBA,
[email protected]
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