The dramatic slump in global oil prices has, as usual, caught governments, industry and markets off guard. In fact, Brent oil prices, a global standard, have dropped by 25 per cent since last June.
Given the chaos in Iraq, Syria, Libya and the Ukraine — Russia is a major oil exporter — some analysts would have predicted rising prices.
But that’s not what’s happening for a constellation of reasons.
As a consequence, falling prices are telling us something about changing oil markets, the stagnating state of the global economy, and the poor quality of extreme hydrocarbons.
The price drop may also be signalling a new angst among global investors due to an enlivened climate change fight and the adoption of the Keystone Principle by community groups across the world.
The principle states that the simplest thing society can do to avert climate disaster is to stop investing in costly oil and gas infrastructure that lock-in dangerous fossil fuel emissions for decades.