Price Wars in Global Oil Markets

Over the last decades, the international community has witnessed a number of steep declines in oil prices. The most recent plunge began in June 2014 and by January 2016 the Brent oil price fell 77% and remained at relatively low levels afterwards. Some analysts believe the fall in oil prices in the mid-2010s has many in common with the collapse in oil prices in the mid-1980s. They both were provoked to a great extent by a significant increase in oil production in some exporting countries. Currently there is no definite answer to the question  whether  these  actions  have  been politically  motivated.  However,  there  are  many  experts assuming that during the Cold war the main target of such an aggressive pricing policy was the Soviet Union, but in the mid-2010s the focus shifted to Russia which pursues independent foreign policy in the Middle East and other regions. The article examines different views on the collapse in oil prices in the mid-2010s with references to the past. In particular, it is assumed that such phenomena can have purely economic reasons:  the cyclical imbalances  of world  supply and demand;  constant, fierce competition between exporters for limited markets, especially in the era of rapid development of renewable energy. However, there is also an alternative point of view, according to which Saudi Arabia and some other OPEC members provoked the collapse of oil prices in the mid-2010s with the sole purpose to crush the U.S. shale industry, which for several years has led to a glut in the world oil market.

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