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But before we look at how to cope up, we need to know why the oil prices have risen so sharply and how this oil shock is different from the previous ones.
Reasons of hike in Oil price
Speculative trading
Traders bet on future prices of oil through commodity exchanges. If there is a natural calamity, or if a country's president or the boss of a global oil company makes a statement which could be linked to oil, the traders at the exchanges bet on a higher price in the future. The record high price of nearly $140 per barrel is the July futures price of oil in the New York Mercantile Exchange.
Geo-political tensions, leading to supply disruptions
Caused by war, terrorist attacks or military warfare in oil rich countries, which could affect oil supply...
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