An oil boom is a period of large inflow of income as a result of high global oil prices or large
oil production
Petroleum is a fossil fuel that can be drawn from beneath the Earth's surface. Reservoirs of petroleum are formed through the mixture of plants, algae, and sediments in shallow seas under high pressure. Petroleum is mostly recovered from oil d ...
in an economy. Generally, this short period initially brings economic benefits, in terms of increased
GDP growth
Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performanc ...
, but might later lead to a
resource curse.
History
Some important oil booms around the world include:
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Mexican oil boom (
Mexico
Mexico, officially the United Mexican States, is a country in North America. It is the northernmost country in Latin America, and borders the United States to the north, and Guatemala and Belize to the southeast; while having maritime boundar ...
, 1977–1981)
*
Pennsylvanian oil rush (
United States
The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...
, 1859)
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Texas oil boom (United States, early 1900s–1940s)
*
Calgary oil boom (
Canada
Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...
, 1947)
*
North Dakota oil boom (United States, 2008–2015)
Consequences
According to the
Dutch disease theory, the sudden discovery of oil may cause a decline in the manufacturing sector. The consequences will vary from country to country, depending on the country's economic structure and stage of development.
[
] For example, after the oil boom in
Gabon
Gabon ( ; ), officially the Gabonese Republic (), is a country on the Atlantic coast of Central Africa, on the equator, bordered by Equatorial Guinea to the northwest, Cameroon to the north, the Republic of the Congo to the east and south, and ...
, the country showed symptoms of the Dutch disease,
[
] while oil-producing
Equatorial Guinea
Equatorial Guinea, officially the Republic of Equatorial Guinea, is a country on the west coast of Central Africa. It has an area of . Formerly the colony of Spanish Guinea, its post-independence name refers to its location both near the Equ ...
did not.
See also
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Energy crisis
An energy crisis or energy shortage is any significant Bottleneck (production), bottleneck in the supply of energy resources to an economy. In literature, it often refers to one of the energy sources used at a certain time and place, in particu ...
*
1970s energy crisis
The 1970s energy crisis occurred when the Western world, particularly the United States, Canada, Western Europe, Australia, and New Zealand, faced substantial petroleum shortages as well as elevated prices. The two worst crises of this period wer ...
**
1973 energy crisis
In October 1973, the Organization of Arab Petroleum Exporting Countries (OAPEC) announced that it was implementing a total oil embargo against countries that had supported Israel at any point during the 1973 Yom Kippur War, which began after E ...
**
1979 energy crisis
A drop in oil production in the wake of the Iranian revolution led to an energy crisis in 1979. Although the global oil supply only decreased by approximately four percent, the oil markets' reaction raised the price of crude oil drastically ...
**
1980s oil glut
References
{{reflist
Commodity booms
History of the petroleum industry
Petroleum economics