Oil reserve is exhausted but the price of oil in international market is increasing.how it effect the demand &?

supply of oil?Oil reserve is exhausted but the price of oil in international market is increasing.how it effect the demand %26amp;?
supply shifts left (there is less oil), demand stays same





price goes up, and quantity goes downOil reserve is exhausted but the price of oil in international market is increasing.how it effect the demand %26amp;?
hi dear,





First and most important thing, it is not the case that oil reserves are exhausted. Even after decades of consumption of crude oil, we still have oil for another 15-20 years.





The problem is demand and the supply of oil. Oil supply is controlled by big oil producers mainly GULF countries.Now, even if they have large reserves they restrict the supply to control the price of Oil so that they maintain high prices and have big profits.


Also, there are other factors too for increasing international oil prices like conflict between countries and nature disastors.





Now as the economy of each country is growing, demand for oil is increasing. Now, if supply is kept same by the oil producers for a long time, the oil price will go up.


With increasing oil prices, people or say countries will purchase less quantity in coming future beacause they have limitations of their budget. They will lookout for alternate energy resources. That will result in decreasing the oil prices in long future.





You can take the current example. With the global economic turmoil, the demand of oil get decreased and that result in a big fall in oil prices.





I think this much information is sufficient for you.

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