Effects Of The Oil Prices On The Economy

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Evaluation of the effect of the oil prices on the economy. Introduction: From many decades oil is discovered and considered as the essential base in every part of people lives. It is the energy source and raw material that drives development. Oil is currently the most important commodity (EL-Sarif et. al. 2005). It is vital to transport (air, sea, road and rail) and also the production of goods for example, tar and plastic. With the demand for energy has risen relentlessly over the last 150 years in line with industrial development and population growth. Oil is the lifeblood of the modern world, and the combustion engines its indomitable heart. During the last century, consumption of products which are extracted from crude oil has increased significantly by a factor of 200 times as well as an unprecedented expansion of economic activity (Kashcheeva and Tsui, 2015). Recently, government of the countries that produce oil from all over the world are more interested in oil for many reasons such as: • Oil provides national interest Crude oil is used for the national benefit and this can take different forms. For example, military systems, political and economic aspects. Modern military systems rely on petroleum to provide mobility. In 1913 British navy converted from using coal to oil and this provides introduction of aircraft and tanks to the battlefield which give superior to the British army at that time (EL-Sarif et. al. 2005). In the terms of economics petroleum
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