Recently, the world has lived  for some time, and still lives, in a situation   that would lead,   among other things, to an increase the price of crude oil. However, this has not happened.  On the side of supply, there are uncertainties on production of Libya and of other countries, like Nigeria. The ongoing civil war in Syria has moved into Iraq and menaces to extend to other areas. On the other side , the supply of Russian gas to Europe may still be  reduced  or even cancelled, as the problems about Ukraine  remain  unresolved, and  actually, seems to move  to a sort of half way, which can’t last  for a long  time. 

The supply of gas to Europe might become  difficult if the two sides remain in such a rigid positions. The Ukraine problem has degenerated in a sort of confrontation, with United Europe trying to reduce the Russian position for new gas supplies from the producing countries, a strategy which should be corrected as soon as possible, as bad feelings with your main supplier of energy is the last thing you might like to have.

The last event in Ukraine, downing  a big passenger plane  is an act of war that must be punished. Such an event signals that the situation is definitely out of the hands of responsible people, and might indicate to the big countries the need to   proceed quickly to a reasonable compromise before the situation of the area become similar to that of the Middle East.

In Europe, oil demand  has not  increased,  reduced  by  the  high price of gasoline: it  is still  growing strong in China and in  the Far  East. Notwithstanding all these tensions, the crude oil price has remained relatively stable in the last few years.  Every  now and then  speculation  in the futures  market grows rapidly, with the usual procedure  of  offering high prices  for future sales , which is  the way to push  the oil price until it  will eventually increase. Up to now, the operation had no success.  The wars in the Middle East and these attempts on the future market did not suffice, and failed to create a scare, and a jump of prices.

Perhaps, the great producer of the Middle East, Saudi Arabia, considered that the present political mess did not need, in addition, an increase in the price of oil. At the present price, the Saudi producers do not need more, and it is part of their way not to act   to   change things without a serious reason. There is no difficulty  in satisfying the increasing demand all along the Far East,  and there is no reason to increase price  in the traditional market , Europe. At the present price , the Saudi producers do not need more , and they have  a tendency  of not being   interested in changing without a definite necessity.

Furthermore, Saudi Arabia is no more  tied to his  great ally the , United States , and it  has let  the war to penetrate  from Syria into Iraq without considering  an increase of the price of oil . Also,   it never believed in a large export of crude oil from USA, as it is   well informed of the political and legislative situation in Washington and in New York.  The old law, which forbids export of crude oil, is still valid and applicable.   So  the Saudi  were quite safe that the price of crude  oil  would not slide down ,as the  American exports   was the  action  that could have done it .

A part from the law, there is also a dearth of pipeline  and other equipment, especially for gas, to serve export points along the American coast.  So, the Saudi did not  play for an increase of the crude oil , and  the USA perhaps  did not  realise that large exports of crude and gas   proposed many times  would  have seriously  reduced the oil price, or , possibly , they also wanted  the price to stay up.

It is difficult to define the strategy of the other large producer, Russia. After the conclusion of the agreement for a pipeline to  China,  Russia would be delighted by a higher  price of crude oil that would  increase the flow of dollars without increasing production, which may be not easy for the Russian oil industry.

The increase of the oil price would have hit the consumers, and particularly the Europeans, who have a diminishing production of crude oil, and import large amounts from Middle East and Russia. An  higher crude price  would  increase the difficulty  of the European countries  who  are trying to reduce  their debt , and have to follow an European dictated   strategy  that will  not help their  recovery.  It also would be  quite damaging for countries that are just trying to improve from a strong deflation dictated by the European Bureaucracy. However, up to now the conditions for avoiding an increase of the price of oil are not in the hands of the European countries.

The increase has not happened,   but the danger is always present:  the choice might be in the hands of the USA, but the general political situation in the USA might not allow the play in favour of its European allied.  Europe started years ago to change its energy structure. The non conventional electricity   has been developing quite fast,   creating   a difficult problem for the conventional sources, and for their structure of discontinuous sources operating only in the daylight hours, and in the windy hours. 

Moreover, Europe today is not a homogeneous area. The difference among countries has become enormous, and not negotiable. Germany has an economic surplus bigger than that of the USA and of China, and it won’t be disturbed by any increase in the price of oil. The other countries, with a much weaker position, are considering   a reorganisation of their energy consumption. Up to now oil has been the main energy source, and the cost of it, being a large part of the total cost of transport, determines the price of everything. Up to now the increase of the price of oil has been postponed. How long will it last?