Journal opinion article Essay Example | Topics and Well Written Essays - 500 words - 3

Journal opinion article - Essay Example In this interplay of a basic economic concept pertaining to supply and demand, many individuals on a smaller scale are gaining from the benefits of affordable oil. Nevertheless, this might as well be a temporary condition because of its more encompassing implications. The instability of prices for this major commodity caused the creation of the Organization Of Petroleum Exporting Countries (OPEC) to control production and prices. The oil prices seem good on an individual level but this indicates an even bigger economic and political issue that entails the OPEC’s involvement. Yergin states that the decision not to reduce production greatly affects less affluent OPEC members compared to their more financially stable counterparts. Venezuela and Iran are among those countries suffering from the blow of plummeting oil prices. Member nations classified as developed countries are more resilient and have steady reserves to cushion the fall. â€Å"The OPEC members in big trouble are the â€Å"have-nots†Ã¢â‚¬â€those with small financial reserves and high government budgets† (Yergin para.9). Another equally prevailing factor in this issue is the Russia-Ukraine conflict. Notable is the fact that Russia is not a member of the OPEC and yet is the biggest producer of petroleum in the world. Almost majority of its budget comes from its oil revenue and in a country largely reliant on imported consumer goods, this spells trouble. Russia’s falling currency equates to the fact that it has to pay more to get the goods it needs. Together with other sanctions imposed on the country due to the on-going conflict, Russia is experiencing major economic woes (Yergin para.11). On a microeconomic level, the affordable prices of oil mean an increase in the purchasing power of individuals and other enterprises. Fuel at a lower cost means value for consumers felt prominently by vehicle owners who purchase it on a regular basis and manufacturers who use it