The surplus of oil in the 1980s was a serious surplus of crude oil caused by falling demand following the energy crisis of the 1970s. World oil prices, which had peaked in 1980 at more than US $ 35 per barrel (equivalent to $ 104 per barrel in 2008 dollars, when adjusted for inflation), fell in 1986 from $ 27 to below $ 10 ($ 60 to $ 22 in dollars 2008). The glut began in the early 1980s as a result of slowing economic activity in industrialized countries (due to the 1970s crisis, particularly in 1973 and 1979) and energy conservation fueled by high fuel prices. The real value of the 2004 dollar adjusted for inflation dropped from an average of $ 78.2 in 1981 to an average of $ 26.8 per barrel in 1986.
In June 1981, The New York Times stated "Fatty Oil!... is here" and Time Magazine states: "the world temporarily floats in a flood of oil", though next week an article in The New York Times warned that the word "glut" is misleading, and that in reality, while the temporary surplus has lowered prices, prices are still way above pre-crisis levels of energy. This sentiment was echoed in November 1981, when the CEO of Exxon Corp also characterized the glut of being a temporary surplus, and that the word "satiety" is an example of "our American propensity for excessive language". He writes that the main cause of glut is the decline in consumption. In the United States, Europe and Japan, oil consumption has fallen 13% from 1979 to 1981, due "in part to the huge oil price hike by the Organization of Petroleum Exporting Countries and other oil exporters", which continues. a trend that began during the 1973 price hike.
After 1980, reduced demand and increased production produced a glut in the world market. The result is a six-year decline in oil prices, which peaked by plunging by more than half in 1986 alone.
Video 1980s oil glut
Produksi
Non-OPEC
During the 1980s, reliance on Middle Eastern production shrank as commercial exploration developed the major non-OPEC oil fields in Siberia, Alaska, the North Sea, and the Gulf of Mexico, and the Soviet Union became the world's largest oil producer. Smaller non-OPEC producers including Brazil, Egypt, India, Malaysia and Oman doubled their output between 1979 and 1985, to a total of 3 million barrels per day.
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In April 1979, Jimmy Carter signed an executive order that would remove the price control of petroleum products in October 1981, so the price would be entirely determined by the free market. Carter's replacement, Ronald Reagan signed an executive order on January 28, 1981, which immediately enacted this reform, allowing the free market to adjust the price of oil in the US. It ended the withdrawal of crude oil from the market and artificial shortages, pushing up oil production. The US Windfall tax profit was lowered in August 1981 and removed in 1988, ending disincentives to US oil producers. In addition, the Trans-Alaska Pipeline System began pumping oil in 1977. Alaska's Prudhoe Bay Oil Field entered peak production, supplying 2 million bpd of crude oil in 1988, 25 percent of all US oil production.
North Sea
Phillips Petroleum discovered oil in the Chalk Group at Ekofisk, in Norwegian waters in the North Central Sea. Inventions increased exponentially in the 1970s and 1980s, and new fields were developed across the continental shelf.
OPEC
From 1980 to 1986, OPEC lowered oil output several times and nearly half, in an effort to maintain high oil prices. However, it failed to maintain its superior position, and in 1981, its production was surpassed by non-OPEC countries. OPEC has seen the world market share drop to less than a third in 1985, from about half during the 1970s. In February 1982, the Boston Globe reported that OPEC production, which reached its peak in 1977, was at its lowest level since 1969. Non-OPEC countries at that time supplied most of Western imports.
OPEC membership began to share opinions on what actions to take. In September 1985, Saudi Arabia became fed up with de facto propping up prices by lowering its own production in the face of high output from elsewhere in OPEC. In 1985, daily output was about 3.5 million bpd, down from about 10 million in 1981. During this period, OPEC members should meet production quotas to maintain price stability; however, many countries raise their reserves to reach higher quota, deceived, or simply refuse to approve quotas. In 1985, the Saudis were tired of this behavior and decided to punish the undisciplined OPEC countries. The Saudis ignored their role as swing manufacturers and began to produce at full capacity, creating a "huge surplus that angered many of their counterparts at OPEC". High-cost oil production facilities are becoming less or even unprofitable. Oil prices as a result fell to the level of $ 7 per barrel.
Maps 1980s oil glut
Reduce the request
OPEC relies on the inelasticity of oil demand prices to maintain high consumption, but underestimates the extent to which other sources of supply will be profitable as prices increase. Power plants from coal, nuclear power and natural gas; home heating of natural gas; and ethanol alloy gasoline all reduce the demand for oil.
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The fuel economy of new passenger cars in the US rose from 17 mpg in 1978 to more than 22 mpg in 1982, up more than 30 percent.
The US imported 28 percent of its oil in 1982 and 1983, down from 46.5 percent in 1977, due to lower consumption.
Brazil
Impact
The 1986 oil price collapse benefits oil-consuming countries such as the United States, Japan, Europe and Third World countries, but represents a serious loss of revenues to oil producing countries in northern Europe, the Soviet Union and OPEC.
In 1981, prior to the flood, Time magazine wrote that in general, "Saturation of crude oil leads to tighter development budgets" in some oil-exporting countries. Mexico experienced an economic and debt crisis in 1982. Venezuela's economy contracted and the rate of inflation (consumer price inflation) rose, remaining between 6 and 12% from 1982 to 1986. Even Saudi Arabia's economic power was significantly weakened.
Iraq has been long and costly fighting against Iran, and has a very weak income. That upset by Kuwait contributed to the glut and was suspected of pumping oil from Rumaila field under their shared border. Iraq invaded Kuwait in 1990, planning to increase its reserves and revenues and cancel its debt, which resulted in the first Gulf War.
The Soviet Union had become the major oil producer before the flood. The fall in oil prices contributes to the nation's final collapse.
In the US, domestic exploration and the number of active drill rigs are cut dramatically. By the end of 1985, there were nearly 2,300 drill rigs in the United States; a year later, almost no 1,000. The number of oil producers in the United States declined from 11,370 in 1985 to 5,231 in 1989, according to data from the Independent Petroleum Association of America. Oil producers refrain from seeking new oil fields for fear of losing their investment. In May 2007, companies such as ExxonMobil did not make nearly the investment in finding the new oil they did in 1981.
Canada responded to high energy prices in the 1970s with the National Energy Program (NEP) in 1980. The program came into effect until 1985.
See also
- chronology of the world oil market 1980-89
- Oil solubility 2010
References
Further reading
- World Hydrocarbon Market: Current Status, Projection Prospect, and Future Trends , (1983), By Miguel S. Wionczek, ISBNÃ, 0-08-029962-8
- The Oil Market of the 1980s: One Decade Reject , (1992), by Siamack Shojai, Bernard S. Katz, Praeger/Greenwood, ISBNÃ, 0-275-93380-6
External links
- Energy Information Administration: Chronology of Petroleum Events 1970 - 2000
- 174 Historical Years Houston: Glittering Oil and Economic Slump
Source of the article : Wikipedia
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