The middle east and the new era in the world oil market

Between 2014 and 2016 the oil market underwent sharp fluctuations and the price of WTI oil dropped by 80%.This reflected the changes that were taking place in the oil industry such as the rise in the status of oil shale in US, improved pumping abilities, the end of economic sanctions against Iran, the removal of the threat to Iraqi oil caused by internal instability, the increased role played by speculators and banks in the determination of oil prices based on increasing interest rates and internal conflicts within OPEC. The objective of this article is to reexamine some of the assumptions which have influenced the policies of governments, investors and traders and aims to present the 2014 oil crisis as both a turning point in the oil market and as an event that has limited OPEC s power to determine oil prices. The article also seeks to analyze the factors that have led to the change in the oil market, the effects of the crisis on OPEC oil policy and to examine the implications of the decline in oil prices on social, political and economic aspects.