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CHAPTER ONE
Developments in Global Markets
In contrast, the global economic slowdown and the financial crisis
in the Euro area can be considered as one of the most important
factors that negatively impacted oil prices and reduced their rise
during the year. The key factors that influenced the movement of oil
prices during the year were as follows:
OPEC decisions to maintain their production unchanged played
•
a key role in achieving the balance and stability in oil market.
Some OPECmember countries were individually and collectively
striving to compensate for the reduction in the production in
some other producing countries to avoid shortage of supplies in
the market. As a result, OPEC countries managed to meet the
global demand for oil and keep the global market with abundant
supplies during the year, and this was a crucial factor behind the
relative stability that characterized the market especially during
the second half of the year.
Geopolitical factors, in particular the political developments in the
•
Arab region, where the first spark began in Tunisia at the end of
2010. The global concern regarding the possibility of spreading
of those developments to other oil producing countries in the
region and their repercussions on the supply in light of the vital
role played by the Arab region in supplying the global oil market
with its needs. In addition to the heightened tensions of Iran’s
nuclear program which led to imposing oil embargo on Iran by the
European Union and financial sanctions by the United States. All
these developments raised fears of possible supply disruptions due
to threats of closure of transportation routes in the Arab Gulf.
Sovereign debt crisis in the developed countries, particularly in
•
the Euro area, which began in Greece to include other countries
that become on the brink of bankruptcy representing a major
challenge for the global economy.
