Factors that have influenced the demand and production of oil
International relations: If your country depends on foreign imports of oil, it is very important that you are able to maintain good relations. This is not always possible as highlighted by the relationship between the US and Venezuela.
Venezuela threatens to stop US oil exports - Washington Post article
Political instability: Many countries that are rich in oil are politically unstable. Political instability can effect supplies and cause price increases. Libya has had recent political problems and countries like Iran and Iraq are not totally stable.
Political instability creates business risk in Iran
Emissions quotas: International agreements like Kyoto are setting greenhouse gas emission quotas. Individual regions like the EU and the UK are also setting targets. With targets to meet more countries are looking to invest in alternatives (renewable energy that pollutes less).
UK to miss carbon emissions targets - Guardian article
Carbon tax: If carbon taxes are introduced it will greatly increase the value of oil products, making alternatives relatively cheaper and more attractive.
EU plans carbon tax - BBC article
NGO pressure: NGOs are becoming increasingly vocal in their fight against fossil fuels and promotion of greener alternatives. As more consumers listen to NGOs, governments and energy companies are likely to find alternatives.
NGOs walk out of UN climate summit
Human cost of protecting supplies: Many argue that the only reason the US invaded Iraq was in search of new supply of oil. Whatever, the reason the US has lost many of its soldiers protecting supply lines, not to mention thousands of Iraqi's who have lost their lives in the ongoing occupation.
Index of US troop deaths in Iraq - USA Today
Public Image: Because of rising prices at the pump (garages), the link to global warming and oil spills are all giving the oil industry a bad image. Because of this countries and energy companies are looking for alternatives.
BP boycott - BBC article
Public health: Oil used in vehicles, planes and industry all contribute to air pollution, which can have a negative effect on the health of people - especially asthma.
Pollution could cause asthma - BBC article
Exploitation of workers and countries: In many countries dangerous jobs are carried out by poor unskilled workers. As well as exploitation of workers, many countries are exploited for their wealth and the temptation of oil wealth can lead to the creation of kleptocratic governments. The Niger Delta in Nigeria has massive reserves, but the area still remains poor because of local corruption and economic leakage,
Corruption costs Nigeria 40% of oil wealth - Boston Globe article
Nigeria oil spills: Dutch case against Shell to begin - BBC article
Greenhouse effect and global warming: Fossil fuels are all major contributors to the greenhouse effect. To try and reduce the effects of global warming, many countries are trying to reduce their dependency on oil.
Oil spills: When large quantities of oil are transported by sea or pipeline, there is always the risk of accidents. The Exxon Valdez spill in 1989 is one of the most tragic examples of the short and long-term damage an oil spill can cause. The more recent BP oil spill in the Gulf of Mexico is a more recent example.
Examining the long-term legacy of Exxon Valdez oil spill - BBC article
BP oil Spill effects won't be known for decades - BBC article
Damaged caused by extraction: The recent BP oil spill in the Gulf of Mexico is just one example of how extraction can lead to environmental damage. The Niger delta in Nigeria has also seen large-scale environmental damage caused by extraction.
BP oil spill, US's worst environmental disaster - BBC article
Nigeria - world oil pollution capital
Chevron fined $8 billion over Amazon pollution - BBC article
Transportation costs: Because the cost of oil is so high, transporting oil is also extremely expensive. Recently there have been increased transportation worries, with pirates operating off the Horn of Africa (near Somalia) and threats over the closure of the Suez Canal in Egypt.
Oil Tanker Hijacked off Oman - BBC article
Worries over Suez Canal Closure - BBC article
Price of oil: The price of oil is very vulnerable to changes in demand and oil. With current disruptions to supply and growing demand the price of oil is currently over $100 a barrel. As the price of oil increases the cost of alternatives become much more attractive.
Egypt crisis pushes oil over $100 a barrel - Guardian article
Demand for oil: As the world's population exceeds 7 billion people and as countries become richer, the demand for oil (and the price) will steadily increase. Increased demand will be particularly pronounced from emerging markets like China.
Demand for oil from China increases - BBC article
Oil Prices Hit Fresh High - BBC article
Finite supply: Oil is finite, estimates vary but many people believe that we have nearly reached maximum production (peak oil) and over the coming decades we will see a decrease in supply. As supply decreases countries will be forced to look for alternatives.
Oil supplies are running out - Independent article
Domestic supplies: Many countries like the UK are seeing their own supplies of oil run out. This has turned the UK from a net exporter to a net importer. Because of this the UK is looking for alternative sources of energy.
UK turns from net exporter to net importer - Independent article
Increases in extraction costs: As world oil supplies run out, companies are having to extract oil from deeper underground and in more inhospitable places. These increased extraction costs will ultimately the cost of oil is more expensive, making it less attractive.
Extraction costs increase by 55% - Canada.com article
Investment in alternatives: As the supply of oil runs out, energy companies and countries are investing in alternatives. This is becoming increasingly profitable with the price of oil, but with the knowledge that oil will run out, many want to become market leaders.
EU calls for investment to double in alternatives - Bloomberg article