Since early last week oil prices have fallen on both sides of the Atlantic, dipping almost by 13 per cent to a low of $128 or thereabout per barrel, as against $147 a barrel that was recorded in the middle of July.

Currently, US crude has fallen by $2.23 to settle at $123.26 after falling to $122.50 earlier, the lowest since June 5. Brent crude lost $1.92 to settle at $124.52 a barrel.

The gradual dipping of the price of the commodity, to all intents and purposes, should gladden the hearts of non-oil producing countries.

 

The high cost of crude oil that the world experienced over the past few months really distorted the economies of most developing countries.

The distortions in most developing economies resulted in both political and economic unrest in those countries.

 

In India, for example, nearly four million truck drivers took their vehicles from the roads to protest against rising fuel bills.

 

According to the drivers, they had been seriously hit by the oil prices which had risen by 40 per cent since the beginning of the year.

Ghana’s oil import bill for January to June this year, according to the Bank of Ghana, amounted to $1.26 billion or 25.4 per cent of total imports, as against $846.6 million spent for the same period last year.

This means that the country spent over $410 million more to import crude oil between January and June this year as a result of the rising price of crude oil on the international market, statistics from the Bank of Ghana have revealed.

 

This extra resources could have used for other developmental projects.
Non-oil producing countries are those feeling the heat of the sky rocketing oil prices most.

Various reasons have been assigned for the high cost of crude oil prices on the international market.

 

Apart from the weak dollar and the supply concern, as well as the increasing demand for the commodity, one main factor that has always been pushing the price of the commodity to unthinkable heights is the geopolitical events that take place around us.

To go down memory lane, the Arab-Israeli war in 1973 sent oil prices soaring by over 400 per cent within six months. That was the first time oil was used as political weapon.

The 1979 Iranian Revolution equally sent oil prices soaring. The revolution led to a reduction in oil production and at one point production was halted.

The 1980 Iran-Iraq War also saw crude oil prices doubling from $14 in 1978 to $35 per barrel in 1981. By 1986 consumers had begun to reduce their demand for the commodity.

 

The high price at that time also led to increased search for alternatives and exploration for new sources of oil outside the traditional oil-producing regions. That led to crude oil prices plummeting.

The Iraqi invasion of Kuwait in 1990, the Asian crisis of 1997 and the September 11 episode in the United States were the only periods when oil prices went down.

Then, following the Gulf War, crude oil prices entered a period of steady decline, reaching their lowest level for 21 years in 1994.

Oil prices once again suffered a downturn in the wake of the September 11 terror attacks on the United States. According to reports, prices went down by about 35 per cent by the middle of November.

But what changed the trend was the American-led invasion of Iraq. That seriously led to the loss of oil production in the Gulf states.

 

Available figures indicated that by the middle of 2002 there were over six million barrels per day of excess production capacity and by mid 2003 that had significantly dropped to two million.

The American-led war on Iraq and the attacks on Lebanon by Israel in 2006 sent fresh waves on crude oil prices.

 

Although both Lebanon and Israel are not oil producers, the conflict increased tension in the Middle East, sending oil prices to new heights.

Despite the fact that demand growth, supply concerns and a weak dollar have one way or another played various roles in skyrocketing oil prices, geopolitical activities have been the main factors for the present prices of crude oil on the international market.

 
The visit to the Middle East by US Democratic Party presidential nominee, Senator Barrack Obama, may have produced the trick of slowing down crude oil prices on the international market.

 

 The trip to the West Bank appeared to have generated some goodwill among Palestinians and those in the Arab World.

Like people elsewhere in the region, the Arab world is fascinated by the US presidential campaign and this may have a positive effect on crude oil prices.

Visiting hot spots in the Middle East means that should Obama be elected President, the Middle East file will be on his desk from day one.

Obama strongly believes that the Middle East crisis can slow down through effective dialogue, understanding and trust for one another.

 

He has visited Iraq, Israel and other countries within the region. This clearly shows that he is ready for world peace.

The visit to the Middle East, to a large extent, has given the region some level of hope towards peace.

Obama’s pledged that he would not waste a minute before tackling the Middle East conflict if elected President should be refreshing to all peace-loving people in the Middle East.

The Democratic presidential hopeful made the commitment after meeting the Palestinian President, Mahmoud Abbas, in Ramallah in the West Bank.

Saeb Erekat, an aide to Abbas, said Obama was willing to immediately engage in peace efforts.
"Obama confirmed to President Abbas that he would be a constructive partner in the peace process," he said, adding that Obama told Abbas he would "not waste a minute" if elected in November.

Obama never went to the Middle East to beat the war drums but to start the process for a meaningful peace process.

Should the crisis in the Middle East slide, fears of frequent and unpredictable disruptions to supplies will cease and the price of this precious commodity will remain stable for a long time, as the region holds a heavy concentration of oil.

 

The visit by Obama to the Middle East has, to a large extent, helped to curb sharp rising oil prices.