These are the factors that cause oil prices to rise

JAKARTA – Oil prices experienced an increase again felt by the people of Indonesia. There’s nothing you can do but hope for a price drop.

Quoted from media.research, petroleum is a non-renewable natural resource. Meanwhile, in meeting their daily needs, people’s demand for oil continues to increase.

Moreover, it is not balanced with the availability of existing oil. The current imbalance between oil production and consumption causes a fluctuating increase in oil prices.

Also Read: Triggered by the Russo-Ukrainian war, oil prices penetrated USD110 per barrel, the highest since 2014

The following factors have caused world oil prices to soar, as reported by various sources:

1. OPEC

The Organization of the Petroleum Exporting Countries (OPEC) holds an important position as a cartel that plays a role in influencing the supply side of world oil trade. Changes in the production capacity of each country, along with geopolitical conflicts that sometimes hit, are factors that play in shaping the trend of world oil prices.

2. Situation of Oil Producing Countries

62% of the world’s oil reserves are in the Middle East and are centered in five countries: Saudi Arabia, United Arab Emirates, Qatar, Iraq and Kuwait. Improvements in political and security conditions in the Middle East have a great ability to increase oil supply and drive oil prices down; while the escalation of tensions could make the market worry that supply would decrease, which would push oil prices up.

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