How does the price of oil impact the common citizen?
After years of the industrial revolution, oil has become one of the vital elements for the functioning of society and, although the objective is to move towards options that have less impact on the planet, its use in societies with a high level of development is still high.
The panorama of 2020 and 2021 was marked by the consequences of the health emergency that affected the world, which translated into a considerable decrease in oil demand, which in turn translated into a decrease in the price of oil, but 2022 went against all predictions due to the ongoing conflict between Russia and Ukraine.
This conflict has resulted in a considerable increase in oil prices, a situation that impacts all countries and at almost all levels.
Referring to the micro level, this price increase has a high impact on the life of the common citizen.
Analysis of the fall in the price of oil
The price of West Texas Intermediate crude, closed last 19th April 2020 at - $ 37.63, something that seemed impossible. It has never closed negative at maturity before. The Price on the spot contract was also negative, due to the lack of storage
Oil and gasoline prices
The prices of this vital mineral oil have resulted in an increase in gasoline prices around the world. This in turn impacts not only vehicle owners, but also the public transport system in general, and all the goods that depend on distribution.
As for Spain specifically, February 2022 set a historical record with a cost of 1,592 euros/liter.
Oil and goods and services
Although it is true that over the years the world moves to more sustainable options, oil is still an important base of society and, therefore, this increase in the barrel of oil affects almost any good or service that is acquired.
Travel, food, technology, livestock, and many other industries are reflecting rising costs and this is one of the reasons.
For this reason, the costs of food, technological gadgets, air tickets, among others, have increased in all parts of the world.
A service whose increase has strongly impacted the life of the common citizen is electricity, whose costs have exceeded historical maximums in several countries.
The hydrocarbon on which the world depends
As reflected above, oil is still vital to the functioning of the world and the impact of the Ukraine-Russia conflict has affected all industries and countries. This has resulted in the search for alternatives to meet the demand. These include contracts or concessions that promote the oil industry in countries with a high availability of the material.
One such country is Venezuela, whose natural resources are considerably vast but the industry to process them is not sufficiently developed. This has led countries like the United States to establish possible connections or ties that allow investment in said industry in order to alleviate demand and reduce the cost per barrel.
This scenario for 2022 was a surprise for all countries, so the impact on the common citizen could not be reduced in the short term. However, the search for possible solutions does not stop and could represent a boost for other industries or options, such as renewable energies.
A world with clean energy
Different opinions exist regarding the causes of climate change: Some experts state that temperature increases are a normal part of the Earth’s cycle, whilst others interpret this phenomenon as man’s doing.
Clean energy industry grows
Expected investments for 2030 are around one trillion dollars; however, lower installation costs indicate that future investments could be higher than expected.