Pick any current event that interests you. Briefly

Pick any current event that interests you. Briefly summarize the event for your classmates and then apply one of the economic concepts from the course. What are the implications of this event for our economy?

ANSWER

Depleting of the oil reserves

The former Saudi Arabian Minister Yamani Zaki Ahmed quoted in an interview that the ‘’Stone Age did not end because of lack of stone. However, the oil age will end before long before the era.’’ These words came to be real 17 years later that the current oil and gas industry is going through the trouble. Although the complete demise of oil and gas in the world market is still years from today, the industry has started experiencing the shortage. This will ultimately redefine the energy business. Currently, most of the oil producing countries have increased the output at dropping costs. Therefore, the extraction of crude oil has increased more so in the Middle East countries.

The oil, as well as gas industry, has a lot of impact on the current economy.  This is because Oil and gas have the highest demand in the world economy at both cheaper and higher processes. Therefore, the oil and gas industry fall under the monopoly market structure. The oil and gas business have the ability to influence the price at will, and the market demand will not fall. This is because there is no substitute for oil. In most countries in the world, every industry depends on oil for production and transport of goods and services. Therefore, Oil supply touches the economy of all the continents. Therefore, the demand for oil at lower prices increases and this depletes the oil minerals in the countries that are major world suppliers.

In a nutshell, the demand and supply of the oil and gas in the industry have economic impacts in the world market system. The decrease in the cost of oil increases the demand and in turn, increase the supply. The current problem that the leading oil producer countries are complaining that too much supply would deplete the oil reserves in the near years. Therefore, there is an outcry for the control of the world supply of the oil and gas.