After three years of unusual stability around $100 a barrel, oil prices fell steeply in the second half of 2014, dropping from $115 a barrel in June to around $60 by December. With oil critical to national economies, international security and climate change, what does the apparent new world of oil mean?
CFR adjunct fellow Blake Clayton draws on a century's worth of statistical data to offer a revolutionary new look at volatility and crisis in oil markets. Clayton explores the conditions in which oil supply fears arise, gain popularity, and eventually wane, and demonstrates the significant effects these stories have on financial markets.
While the death of King Abdullah of Saudi Arabia may not change the course of Saudi oil policy, Meghan O'Sullivan writes that interesting changes to the Kingdom's cabinet roster and other energy policies could be closer than most realize.
Last month, Soma Oil and Gas, a London based energy company, searching for hydrocarbon deposits off the coast of Somalia, announced that it had completed a seismic survey to ascertain the potential for recoverable oil and gas deposits. Although further details have yet to be released, chief executive Rob Sheppard announced that the results were encouraging. However, Somalia, and potential investors, should proceed with caution when considering entering this frontier market.
U.S. policymakers who worry about the impact of energy developments on geopolitics typically think of high oil prices as bad news and low prices as an unalloyed good. But a sustained drop in oil prices can be dangerous as well. This paper investigates Mexican vulnerability to falling oil prices—and spillovers to the United States—to show how troublesome such a development might be.
The recent oil price crash came as a surprise to many observers due to several critical misconceptions about oil markets, writes Michael Levi. As for prices going forward, “only the reckless would bet with any confidence on one particular outcome.”
While oil prices over the last three years were the smoothest in decades, volatility is back and here to stay argue Michael Levi and Robert McNally. Levi and McNally explain how price fluctuations, rather than high prices, endanger global economic growth.
As oil prices continue to drop, Michael Levi argues that the benefit to American consumers will outweigh any damage to the U.S. economy. However, how you view this plunge in oil prices "depends a lot on where you live and what work you do."
The China National Overseas Oil Coorporation (CNOOC) began drilling in Vietnamese-claimed waters late last week, accompanied by more than seventy vessels, including armed Chinese warships.Elizabeth Economy and Michael Levi write that the United States needs to face up to the full magnitude of the Chinese challenge to have any hope of successfully confronting it.
Authors: Selina Williams, Geraldine Amiel, and Justin Scheck
"To replace what they pump, oil companies need to collaborate with state-owned companies that control 90% of the globe's remaining oil reserves, by a World Bank estimate. But governments often give foreign oil companies access only to the hardest-to-develop acreage. Kashagan's large-scale stumble shows how collaborations in these difficult fields can go sour for both sides."
The Ukraine crisis has spurred calls for ramping up U.S. liquefied natural gas exports to Europe, but lifting the ban on U.S. crude oil exports might help put more pressure on Russia, writes CFR's Meghan L. O'Sullivan.
Authors: Karol Boudreaux, Tiernan Mennen, Larry Diamond, and Jack Mosbacher
Larry Diamond and Jack Mosbacher ("Petroleum to the People," September/October 2013) rightly observe that the coming oil boom in Africa is, paradoxically, a frightening prospect for the continent's poor and marginalized.
The Council on Foreign Relations' David Rockefeller Studies Program—CFR's "think tank"—is home to more than seventy full-time, adjunct, and visiting scholars and practitioners (called "fellows"). Their expertise covers the world's major regions as well as the critical issues shaping today's global agenda. Download the printable CFR Experts Guide.
Campbell evaluates the implications of the Boko Haram insurgency and recommends that the United States support Nigerian efforts to address the drivers of Boko Haram, such as poverty and corruption, and to foster stronger ties with Nigerian civil society.
Koblentz argues that the United States should work with other nuclear-armed states to manage threats to nuclear stability in the near term and establish processes for multilateral arms control efforts over the longer term.
The authors argue that it is essential to begin working now to expand and establish rules and norms governing armed drones, thereby creating standards of behavior that other countries will be more likely to follow.
Learn more about CFR’s mission and its work over the past year in the 2014 Annual Report. The Annual Report spotlights new initiatives, high-profile events, and authoritative scholarship from CFR experts, and includes a message from CFR President Richard N. Haass. Read and download »