In a recent article in the Arab magazine The Majalla, Amy Myers Jaffe, Wallace S. Wilson Fellow in Energy Studies and director of the Baker Institute Energy Forum, and Keily Miller, an Energy Forum research associate, analyze the consistent turmoil in oil-producing nations and what effect these political conflicts have on oil prices and the industry as a whole.
Jaffe and Miller write that while the immediate price volatility arising from these conflicts is apparent, the long-term consequences may lead to even greater and longer-lasting problems:
“History teaches us that abrupt regime change in oil-producing states can lead to a prolonged period of low oil output, often lasting decades. The length of the period of decline is determined not only by the level of damage to existing infrastructure that might ensue from political unrest or civil war, but more significantly by the process of consolidating power that follows the transformation of internal politics.”
Read Jaffe and Miller’s Oct. 27, 2011, article, “The Future of Oil,” and comment below.