One economics aspect of oil industry Essay Example | Topics and Well Written Essays - 500 words

One economics aspect of oil industry - Essay Example The oil industry focuses on demand as a central point of production. As such, a given energy demands rely on the existing economic activity.Supply is a general aspect of the oil industry affected by weather and other geopolitical elements. Oil demand is a vital feature that largely affects the oil industry. Unreliable economic activities directly affect the demand for energy. As such, the oil demand decreases within a given duration. A decrease in oil demand results in a low number of investors within the industry. As such, the industry experiences rising cases of companies practicing monopoly. The ideology revolves around limiting consumers to regulate the supply chain. As such, the independent companies overcharge the government for using the organization’s oil reserves. Independent companies raise revenues through the monopoly policy affecting a country’s revenue or source of income(Spilsbury, Richard &Louise, 202). Countries that produce oil contribute largely to the changes in oil prices. These countries regulate supplies based on individual interest or political gains. As such, the world oil prices fluctuate to accommodate the given interest. Other countries such as the superpowers also engage in practices that undermine oil prices. The various changes within the economy depend directly on the oil prices. Inflation rates shape the oil industry with key participants who tend to control the industry. Powerful countries tend to enlarge shares within the oil producing countries through the oil companies. Decreasing oil fields affect the oil production percentage and eventual supply to the world. Different countries struggle to obtain stable supplies of the oil to meet the rising demands. As such, the world thrives on an unstable environment that reflects on the economy of various countries (Spilsbury, Richard & Louise, 171). Additionally, various organization emerge to regulate the