By Admin 
Crude oil supply: The impact of the war between Iran, Israel and America is no longer limited to them only, but the whole world seems to be getting affected by it from somewhere or the other. Now take crude oil only, whose prices have reached a high level of $ 120 per barrel on Monday. Due to this, the fear of interruption in energy supply across the world has increased again. Along with this, memories of that period are also becoming fresh in the minds of people, when crude oil has reached its highest ever level of $ 147 per barrel. This thing is also surprising because the reason behind the rise in crude oil prices was not any war or conflict.
According to data from the US Energy Information Administration (EIA), oil prices were already rising rapidly. It had increased from around $30 per barrel in 2003 to more than $100 in early 2008. This surge reflects a major change in energy demand around the world. Now the question arises that if this rise in prices was not due to war or geopolitical conflict, then what would have been the real reason.
Why did the prices increase?
- The biggest reason for this record rise in prices is the rapid industrialization taking place in emerging markets like India and China. Due to this, oil consumption had increased significantly, which had an impact on prices.
- Here, due to slow production against the high demand for oil at the global level, there was a shortage of it in the market.
- Meanwhile, due to the decline in the value of the dollar, oil became cheaper for international buyers. Due to this both demand and prices had increased.
- When the value of the dollar decreased, it became expensive to buy it against other currencies, which increased speculation.
- Apart from this, the financial market also played a role in increasing the rally. A study by the Federal Reserve Bank of St. Louis found that increased investor participation in the oil futures market in the mid-2000s may have contributed to greater price volatility.
- Additionally, large-scale capital inflows into the commodity market, especially from hedge funds and institutional investors, further accelerated the rising oil prices after the rally began.
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