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Oil, Bless or a Curse?

In: Business and Management

Submitted By omanistudent
Words 751
Pages 4
Oil, Bless or A Curse? Countries around the world have many sources of revenue which they can benefit from. Oil is a substantial source for many of them. Not only exporting countries advantage from it, also importing countries. This essay will focus on the effects of oil revenues on national economies, the effects of oil prices on oil- consuming economies and the economic alternative to oil production and consumption. Many economies depend on oil as their main source of revenue. It has many effects on these economies, positive and negative. To start with, income from oil reduces poverty in the society and improves its welfare. Oil revenue also contributes highly in the producing countries GDP. Angola, for example is the place where most of Africa’s oil is produced, exports 1.9 million barrels per day. Exporting countries can also use oil in funding schools, hospitals and construction. Low oil prices would normally be considered a downside, but sometimes it forces oil exporting countries to diversify its economy and use oil resources to develop other sectors which is in this case a good thing. On the other hand, low oil prices damage national economies and put a lot of pressure on governments to generate the best solution. Producing countries struggled heavily when oil prices went down and had to lay off large number of employees which gave poverty a rise. Even though the petroleum industry has its upsides, it still has many downsides. World Bank Report remarked “The exploitation of petroleum and mineral resources has been linked to corruption, conflict and poverty”. (Energy and, 2006, p.11). To put it in other word any change any oil prices highly affects both producing and consuming economies. Oil prices are not stable and always fluctuating. Low oil prices positively affect the consuming countries economy, it gives it a huge boost, reduces

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