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Today, the whole world is going through a fuel crisis and suffering from higher prices on oil. The current situations show that Europe, especially the Euro zone is seriously affected by the higher oil prices than any other part of the world. One of the reasons is relative cost of the Euro and the US dollar; the currencies of the Europe and the US. The price of Brent oil in Euros is as same as it was during 2008s. The comparison between dollar and Euro is more in favour of the US and so, the cost of same quantity of Brent oil in the US is comparatively less. The other reason why oil price in the US is less than that of in the countries in Euro zone is the local oil production. Since 2002, oil production in Europe has prominently decreased. This decline in oil production has had major negative impact on European economy. In contrast to this, oil production in the US, especially in North America has increased recently. Moreover, the fact is that European oil does not yield benefits for all the European nations. It fetches all the benefits for the countries that extract oil; such as Norway and the UK, and not Europe. Also, the US utilizes coal and nuclear as fuel significantly and so, it has to import comparatively less of oil than countries in Euro zone. The countries that import oil, also import natural gas. Since the prices on natural gas in the US are relatively dirt cheap than those in Europe, the European countries get doubly hit. And so, the usage of other sources of energy, availability of locally extracted oil and the low prices on natural gas are the main and triggering reasons why oil in the US costs far much less in totality than that of in Europe. And to flash a light on the reasons why there is significant difference between the prices of oil in the US and Euro zone countries, the opinions of the experts of oil and gas industry affirm that the US gasoline is not taxed as highly as it is taxed in Britain and Europe as a whole. The experts also add that as the European economy is already frail and as Europe does not have shale gas reserves that the US has, it is more prone to suffer from the higher prices on oil. The situation might get worse if the dollar strengthens more. It will trigger the prices on oil in pounds and euros even further. Kyles Humphrey is an experienced journalist in oil related fields, who regularly writes articles related to oil prices & indexes and crude oil including tips on investment in oil. Please visit oil.com for more details.
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