What The Oil Crisis Means For Australia (Content Princess – SEO)
Brent crude oil tumbled from $37.28 down to $30.86 per barrel in the past year or so. How is that severe? Well, in the fourth quarter of 2014, Brent was selling at $100 per barrel, meaning its prices have plummeted, and drastically too.
With oil prices currently in freefall (as seen in the above example), sending shivers down the spines of major economies, prevailing countries take wins, and those less fortunate take losses. But what does this mean for our beautiful country? What does this mean for Australia?
The Crisis Itself
Our world has more liquid petroleum than it ever had before, also meaning it has more than it will ever actually need too, and in this fuel-guzzling, energy-driven society, that comes with catastrophic circumstances.
Drastic changes in the supply and demand of oil and other fuels can result in the tearing down of share markets, the shutdown of multi-billion dollar hedge funds and not to mention slashing government budgets, ultimately ending up in spiralling numerous countries into a recession that never needed to happen. A recession that could have been easily regulated and avoidable.
But with greed comes unforeseen, often terrible circumstances. And greed, sadly, in this day and age, is much too common and way too blind. The people are getting greedy to fail to see the aftereffects of their greed because they cannot see past the enormous stacks of money on their desks. And doesn’t that tell us a lot about the world?
What Does This Mean For Australia?
A whole lot of bad
It may seem good at first because lower oil prices mean cheaper petrol right? Wrong. While the prices overall are lower, with Australia being a net oil importer, they have lost a lot of income through oil trading, meaning the Australian dollar has also plummeted. So while the low oil prices have caused the prices of petrol to come down drastically, with the Australian dollar dropping too, it has resulted in what appeared to be a $1.45 decrease per barrel, actually turned out to be a 53 cent increase.
The entire thing paints a very complicated-looking picture for Australia because although we’re importing oil at much lower prices, being a net oil importer and all, that very much looks like a good thing. But the bad side of it is, the nation is a net energy exporter and lots of energy-related products, meaning as well as buying oil on the cheap side. We’re also trading our exports at much lower prices too, because a lot of energy products, such as gas, follow similar price patterns to oil.
Summarising The Crisis
So yes, we may be importing stuff for much lower prices, but in turn, our main export outlets are taking major hits too, so it’s not as though the Australian economy is being boosted due to the cheap imports. Because in actuality, the economy is on the decline because of our main exports taking a hit in all this too. Add the drop of the Australian dollar into the equation, and the nation could be facing one of the most severe declines in its economy it has seen in many years.
- Australian Dollar