Between 1986 and the end of last year the oil price, as indicated by the price of Brent crude, averaged around $25 per barrel at today’s dollar values. It was a price low enough to revive growth in world oil demand – though not in oil’s share of world energy demand – and high enough to encourage the development of oil supplies outside the Organization of the Petroleum Exporting Countries (OPEC), and the expansion of natural gas and other alternatives.
It may not be sufﬁciently high to support increases in per capita incomes in oil-exporting countries, whose populations are among the most rapidly multiplying in the world. So there is a latent conﬂict between their expectations and the continuation of what looks like an equilibrium oil price of about $25.
Export-dependent oil economies are also at risk from price ﬂuctuations. These are not new, but for oil they have been extreme. Between 1993 and 1997 the Brent price was below $25.