Energy and Oil is a strategic commodity and very valuable to everyday life. Millions around the world are affected if there is a significant change in the price of oil, especially if the prices increases. The price is affected by two factors, supply and demand. If the supply is steady, stable and adequate to meet up with world demand there wouldn’t be an issue. But this isn’t the case, to say the least World prices of energy sources began to rise as early as 2005 and showed no sign of stopping, By march 2005 OPEC had admitted to losing control on prices and immediately sought to pump additional barrels but wasn’t sufficient. In 2007 the price of oil nearly doubled and continued to rise into early 2008, leading on to the economic crisis. Gas, coal, nuclear energy and in particular oil reached soaring prices as high as $160 a barrel like someone had lost a grip on it somewhere.

This price spike in oil prices is due to a combination of factors, first the Kyoto protocol that finally came into effect in 2007, the rising demand from India and china, the neglect from oil companies and investors as they search and research on other alternative source of energy. Political struggles, corruption and attacks on oil pipe lines in one of OPEC’s member country Nigeria. Where unrest in the African oil region has resulted to a lost in 175,000 barrels per day. [1] The fall in value of the US currency played a major role and is partly responsible, since the price for these commodities is typically quoted in US dollars. The financial crisis and recessions in the global economy also appears to have contributed to a substantial increase in speculative interest in energy future markets, helping to boost prices.

World oil demand is expected to increase substantially until 2020 according to the Energy Information Administration (EIA , 2006) while in the IEO (Independent Evaluation Office) 2009 projections total world consumption of energy is projected to increase by 44 percent until 2030 with most of its demand from non-OECD economies.

Although the price of a barrel has gone down in recent times and settled, the question is what happens in the event of another decline in supply or demand continues to persist, with failing and short term policies by the institutes involved, policies that fail to come together, correlate and aline with each other, ignoring the fact that the issue at hand if neglected again or not carefully managed can cause devastating effect to the world economies.

Today oil has proved to be a powerful economic tool it has also proved to be a capable political weapon. In other words, oil contributes directly and indirectly to the pro