Political Issues
ISIS is Making the Biggest Threat to Oil Prices Even Worse
Summary:
Last June, ISIS took control of the city Baiji which is home to the Baiji oil refinery that once supplied around a third of Iraq's domestic fuel supply. Recently, ISIS set fire to that refinery.
With the insecure alliance between the Middle East's major Arab powers and limited U.S. assistance, ISIS has proven its power, and its ability to take over. The Middle East controls about sixty percent of the world's proven oil reserves, and if ISIS takes over the major oil field in Iraq, there could be some devastating consequences. Iraq is the second largest producer in the cartel, and if ISIL presses further into Iraq the price of a barrel of oil could go up to over $100.
After years of high oil prices, OPEC tried lowering prices and succeeded with prices per barrel being $50. US rig numbers decreased drastically causing the loss of jobs and a putting a hurting on the companies. Prices per barrel have been back up to about $65 since the beginning of the year, but by October prices are predicted to go back down with the increase in US shale drilling. So far traders have ignored the threat ISIS puts on the oil market and the global economy.
Analysis:
If ISIS gets a hold of the Iraqi oil fields oil prices could skyrocket and the global economy could be drastically affected. Even though the US is very reluctant to get involved and send troops over, if we care enough I think we just need to stop procrastinating and take ISIS down. I know that's easier said than done, but if we don't want to get involved then we need to stop worrying about it or we should just get it over with and do it. If we procrastinate too long it could be possible that the US could be threatened by ISIS, and then we will have to take action. Or, if oil prices are affected then we're gonna care, so I think we should take preventative actions because the Iraqi army is obviously not very effective. It seems like everything in today's society revolves around money, and if oil prices increase drastically, the American people are not going to be very happy. I don't understand a lot about the economy, but if oil prices are a big enough concern in the US economic policy we should start taking interest and concern in the ISIS threat on Iraqi oil.
Source:
http://www.businessinsider.com/isis-is-making-the-biggest-threat-to-oil-prices-even-worse-2015-5

