OIL IN GLOBAL ECONOMY AND WORLD TRADE

Abstract

In the past two decades in the world oil industry underwent significant changes, that created a new production and commercial situation. These processes have affected the production, consumption and trade in oil, which, in spite of serious efforts to increase the share of alternative energy sources, remains the principal energy resource, has a significant impact on the development of global economy. The sharp ups and downs of oil prices has become the acute  problem  of  global  economic  development.  The  collapse  in  oil  prices  in  the  years 2015–2016 has resulted in significant reduction of foreign exchange earnings for state budgets of the sellers of liquid hydrocarbons. In an effort to remedy the situation, the exporting countries, beginning in the fall of 2016, undertook vigorous steps in order to prevent a further decline in oil prices. A key role in this process was played by Russia and Saudi Arabia who are the largest exporters of oil. They managed to convince the majority of oil-producing countries to cut production. By this way, the exporters managed to stabilize the market, but the world oil industry remains at the epicenter of the geo-economic and geo-political confrontations. Moreover, it has become the object of international trade and financial sanctions and restrictions affecting the interests of a number of countries, including Russia.