From a Curse to a Blessing

Turbulent Oil Prices Prompt Infrastructure Reforms

A woman walks along an oil pipeline in Otu Jerenmi in Nigeria's oil-rich Niger Delta March 5, 2006. George Esiri / Reuters

In just a few years, the international oil market has changed profoundly: new oil deposits discovered off of Brazil and Africa’s shores have boosted supply, as has the massive development of the shale oil in the United States. And instead of reducing its output, the Organization of Petroleum Exporting Countries (OPEC) decided to hold steady. Saudi Arabia, which leads the group, wants to protect its market share from U.S. competition and seeks to hamper Iran’s ability to take advantage of high oil prices when sanctions against the nation are lifted. These three factors have led worldwide oil production to increase from83.2 million barrels per day in 2010 to over 88.6 million barrels per day in 2014. This has happened just as demand has contracted, thanks to slowing growth in China, stagnation in Europe, and potential recessions in emerging countries (such as Brazil, Russia, and Turkey).

In turn, Brent prices plunged

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