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Current fluctuations in crude prices are unprecedent since oil was discovered in the first half of the 19th Century.
The first major hike from $2.5 to $11 was in the 1970s, but that seems insignificant compared to the current leaps that brought oil up to nearly $150 per barrel.
Today, oil prices go up and down by as much as $11 during the course of one trading session.
Such fluctuations have left their print on global economies, including oil-producing countries, which were badly affected during the last three decades.
The series of hikes, which began three years ago, is different than earlier ones, as it has affected all aspects of life. It has resulted in international crises and imbalances, which have led to food price increases and record inflation rates.
Accordingly, oil importing and poor countries have been exposed to social instability.
Developed countries have been affected as well. For example, people have been looking for cheaper means of transportation. Bicycles are being used once again in rich and poor countries alike, and used cooking oil is being recycled to be used as fuel in New York, just as in Gaza, Dhaka, Rio de Janeiro and Brussels.
Oil producing countries have also witnessed an increase in commodity and service prices for the first time, which swallowed a big chunk of their profits from high oil revenues.
These developments led to new challenges in these countries' food requirements, especially after countries that witnessed shortages in food supplies, issued export bans.
Negative impact
The shortages and price increases were a result of rising energy and food production costs.
The sharp and consecutive hikes left negative impacts on the global economy as a whole.
The Oil Petroleum Exporting Countries Organisation (Opec) has called for curbing oil prices, and keeping them within appropriate limits. This approach may seem odd, as Opec always strived for increasing oil prices.
However, Opec's approach is justified since the current oil prices will lead to a global economic slowdown, higher inflation as well as increasing the burden of developing oil-importing countries.
This situation has significant economic, social and humanitarian dimensions, which led GCC countries to extend their assistance to the countries which are badly hit through backing up their energy requirements and basic needs. Producing countries are aware of the huge profits made by international oil companies.
Thus, they call for curbing prices in order to preserve the global economic stability, and provide a solid base for balanced development, which can only be accomplished if energy is available at fair prices.
This a demand of oil producing countries, both within and outside Opec.
Depleting wealth
Oil is a wealth that will soon be depleted, and its returns should be invested to create other income sources.
Opec suggest that a fair price is $70-80 per barrel, which should allow oil producing countries to prepare development programmes for the post-oil era, and will not be a burden on international economies, nor will it lead to inflation rates that take away a large percentage of oil export profits.
Any price below the $70 margin will be unfair for oil exporting countries, which depend on these exports as a major source of their income.
Despite this view, we find the situation complicated by interests of markets, speculators and oil companies, which lead to price fluctuations.
And against Opec's wishes, oil prices will continue to increase, which will lead to additional crises and turbulence for global economy.
The writer is a UAE economic expert.
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