1 February 2012


Paul Stevens

Professor Paul Stevens

Distinguished Fellow, Energy, Environment and Resources


  • Although there have been no serious threats to global supplies since the Arab uprisings started, oil prices will remain volatile as political developments combine with global economic gloom, and surviving regimes spend to pacify populations.
  • Physical oil markets managed the loss of Libyan crude exports well. However, in the paper markets, concerns over major Gulf Cooperation Council countries caused prices to strengthen.
  • Under two long-term scenarios – 'Business as Usual' and 'Democracy Develops' – governments will seek higher production to provide more revenue. This could open the upstream to foreign investment, although democracy could create a nationalist backlash. There are also questions over whether democracies choose faster rates of depletion.
  • With democracy, there will be a greater role for the private sector, with important implications for the reform of the upstream and the role of national oil companies.
  • A growing Sunni–Shi’a split within OPEC may threaten the management of the oil market in the event of downward pressure on prices if the global economy reverts to recession.
  • Ultimately the Arab uprisings could lead to an increase in oil supplies if depletion policies change and there is a greater role for the international oil companies.

Also read:

An Embargo on Iranian Crude Oil Exports: How Likely and with What Impact?Programme PaperPaul Stevens, January 2012
 Burning Oil to Keep Cool: The Hidden Energy Crisis in Saudi ArabiaProgramme ReportGlada Lahn and Paul Stevens, December 2011