We all are very well aware that oil is one of the most precious things in the world. Countries that are rich in oil have greater commodities than other countries, and being that oil is very much necessary for numerous reasons, they also manage to hold their economies in high esteem. But what is the real worth of oil, despite the current price? Will oil go out of use and how soon? When will we see the changes in the world economy? Find out all about it here.
The primary worth of oil lies in the fact that it is used in order to make numerous machines work. It is also used for heating and many countries import oil even though only a few export it. Countries which are rich with oil, such as Saudi Arabia, Russia and Norway, seem to be doing quite well based merely on the fact that they have plenty of oil.
This is their greatest asset that makes their countries economically successful and thriving. That is not to say that these countries are not well aware that trends might be changing soon, and that oil could go out of fashion. Which is why they also dedicate their valuable resources to finding alternative ways for making a solid economy.
No one can answer this question with utmost precision, but it is expected that this very valuable resource is replaced with alternative means of energy sometime in the future. In addition to that, it is also expected that oil becomes replaced with energy which can be recycled, renewed and used over and over again.
Which is, as you probably know, not the case with oil. The reserves of oil are finite and we as humanity must use this time to find the resources of energy which will replace oil in case it disappears sometime in the future.
In addition to that, the changes in the price of oil and the reserves of oil will also impact the world economy and probably be the main reason for the shift in economic power in the world.
This is why even the countries with oil are eager to develop other resources as well.
This is quite easy to notice that the world is changing constantly. If it were different it would be good for any of us. Constant change means constant improvement. Today we will talk about one of the hottest subject in economy and that is the shift that awaits us regarding oil and technology.
At the moment oil is very precious because it’s a resource of energy. However, not many countries are blessed with having this valuable resource. Namely only few of the countries in the world have lost quantities of oil which they can exploit and sell.
As for the rest of the world, they are dependent on oil because all the cars that we use and heating systems require oil in order to be able to properly work. However, it is safe to say and expect a shift in the future that will happen once everything we know changes.
As we sit here and use certain systems of technology used for heating or transportation or whatever, we are still unaware that the future is here. Scientists are developing different systems that will be used 10 or 20 years from now. Renewable sources of energy are definitely one of the main things that all the scientists in the world are trying to develop so that the world wouldn’t rest on just oil.
This means that at the same time energy will be easier to obtain, but where does that leave oil?
Hopefully, scientists and researchers will find a way for the whole planet skews renewable sources of energy with the same quality that is now gained from energy resources such as oil. Unfortunately, oil is an energetic resource which cannot be renewed.
In other words there are only limited quantities of oil in the world that people can use and once we use up all the resources that are available we will end up with no resources at all. In addition to that, as the resources diminish it is safe to expect that the price of oil will rise unless we do something about it. The best way to prevent this catastrophe from happening in the future is to develop systems that will run on renewable sources of energy.
It definitely seems so, as the Austrian energy company OMV plans to join forces with Iranian energy sector in order to boost development in oil field. The contract between two countries seem to predict a five-year old collaboration in the field of energy and oil.
It has been recently reported by the official Islamic Republic News Agency that Sorena Sattari was visiting Vienna. In her role of a vice president for science and technology for Iran. During this state visit, bilateral cooperation in the fields of energy and oil was discussed.
And agreements were signed by both Austria and Iran. It was also confirmed by the Iranian vice president’s advisor that this visit was just a part of a five-year plan. Which is supposed to stimulate bilateral cooperation between the two countries.
When it comes to Iran’s ability to produce more oil, it is definitely something which is expected. Being that Iran is allowed to produce more oil than other counties which are also members of the Organization of Petroleum Exporting Countries. Also, Iran is one of Islamic countries which is predicted to only grow in the future and improve its economy.
The Iran’s potential to produce energy and oil, is definitely what attracts European countries and make them sign contracts like this one. To ensure collaboration and availability of energy resources in the future as well.
OMV a company from Austria. Europe is just one of European companies to rely on Iranian Energy. Also, back in January OMV has signed new arrangements with Dana Energy Co. A company from Iran which is renowned for exploration and development.
Also, around that same time OMV was added on a list of oil and gas companies from abroad that can take part in tenders and production in the future. The list of companies with this status includes 29 foreign companies. Including French company Total which has signed agreements with the Iranian energy sector last year. More European companies are yet about to recognize the full potential of Iran and surrounding countries.
We all know that oil is an important asset, which is really valuable. But, how can the price of this fuel affect the economy of entire countries and in what way? Let’s explain the way in which the price of oil has managed to affect the world economy in the past and the ways in which it could affect the world economy in the future.
Global economy is very much influenced by the price of oil and it is understandable that fluctuations in the oil market will also reflect on the economy of the world. As the prices of oil have been low since 2014, it is expected that we will see global benefits of this current trend. The prices of oil have been reducing gradually after they have abruptly skyrocketed after the crash of the banks which happened in 2008.
We can hope that the progressive growth will slowly show across the entire world, and thus affect the world economy as a whole. The more worrying all oil prices is expected to keep the world economy in balance and make sure that any sharp changes in oil prices are just sporadic.
The reason why the price of oil frequently fluctuates is the global supply and demand of oil. In other words, the world price is directly affected by the global growth or global decrease of growth. As the demand for oil increases so does the supply. Because at the moment we still have sufficient supplies of oil which we use as the source of energy. However, it is also advisable that people work on alternative sources of energy and create renewable sources of energy which will be available to everyone. With renewable sources of energy we will not have to rely so much on oil, and it will have such a significant impact on the world and global economy.
At the time being low oil prices are at our disposal but all this can get a lot more complicated due to unexpected episodes which might happen such as shortage of oil or other world crisis. It is dangerous to put such strong emphasis on oil because any negative feedback can make devastating effect on the entire global community and create serious financial problems on a global level.
As we all know, virtual reality and artificial intelligence are slowly but surely taking over vast fields of the economy in many countries. The modern technology is a constant growing curve, and nobody can stop this trend. However, instead of stopping it, we should be more focused on controlling it. This situation may sound like a scene from a sci-fi movie, but we could end up jobless and homeless because many companies substitute humans with machines.
Mark Benioff, the CEO of Salesforce said –
“Technology’s always taken jobs out of the system, and what you hope is that technology’s going to put those jobs back in, too. That’s what we call productivity. I think a lot of people don’t understand how deep AI already is in so many things.”
Although the scenario with the AI taking over the world is highly unlikely, it raises some concerns.
The benefits of automated production are pretty obvious. Robots are much more productive than humans will ever be. Also, robots don’t require a vacation, sick leave, or bonuses. Furthermore, they don’t organize unions, a complaint about the pay or the minimal wage.
As we can see, robots are a much better solution for any large company in comparison to the raw workforce. As far as the economic fear goes, it’s simple. Once your company hires a robot in your position, you won’t be a necessity for the company, and you’ll get fired.
Mr. Mark Benioff said –
“What you hope is that the technology doesn’t outpace the system so that it starts to strip the jobs away, and that’s the fear of artificial intelligence.”
He also addressed the struggle between the modern technology and its contribution to the economy. In his opinion, the most important thing is how are we going to control it.
“Now the question is, with all of this new technology, how do we get growth? But that growth has to be balanced against the trust, because when you have all this new technology, I think that the big question that’s getting asked here is can we trust it?”
Would you trust it?
You most likely cannot imagine your day without a smartphone, tablet, or a computer. It’s just the way things work nowadays. If someone told you fifteen years ago that you’re going to carry a device in your pocket with a million different functions, you’d call them insane. Whether you like it or not, smartphones play an important part in our lives already, and that trend definitely won’t die off in the next couple of decades.
The global amount of smartphones is set to grow by 50% in the next four years. If you put this piece of information into perspective, over six million devices will be present on the market by 2020 totaling over $335 billion in revenues. Furthermore, tablets and smartphones make more than 60% of connected smart devices. Bear in mind; they made around 17% back in 2008. Therefore, for less than nine years, smartphones and tablets found their way into the consumer’s hands quickly and noted an incline of 43%, which is impressive, to say the least.
Ian Fogg, a director at IHS Technology, said –
“Mobile devices and services are now the hubs for people’s entertainment and business lives, as well as for communication. The smartphone has replaced the PC as the most important smart connected device.”
The leaders on the market are Apple and Samsung which already announced innovations and a revolution in smart technology.
Spending money on micro transactions
One of the main sources of revenue is a phenomenon called micro transactions. For instance, one research showed that the expected consumer spending on apps is over $74 billion by 2020. In 2016, the global consumer spending was $54 billion.
IHS Markit said –
“There are many opportunities for new apps, mobile payments, and mobile money services. Asia, notably, will continue to play the number one role in the global apps market – accounting for more than 50 percent of consumers spending.”
Experts think that payments and messaging are going to be the two major services in focus by 2020. The number of devices from which payments are possible is around 2.7 billion now, and it’s expected to be more than 5 billion by 2020.
Instead of fighting the technology, consider mastering the new ways of doing business. You might find it handy.