Rising oil prices and Africa's oil future

As international oil prices continue to spike due to the increased anxiety of an impeding war with Iran and the crippling sanctions it faces, with some of Iran's leading oil export destinations siding with the US government in imposing sanctions on buying Iranian oil.

However, the perception in Africa is far more different. Countries along the Eastern African region continue to discover newer oil and natural gas finds in a region that has previously remained unexplored. As a whole, Africa is 5 times less explored than any other continent. So the potential to find newer oil patches are highly plausible. The East African region is slowly heading towards being a key exported of oil in the years to come.

Today oil prices continue to spiral. Within the short term it is expected to remain high, especially due to he speculation over an Israeli attack on Iran. If that eventually takes place there is bound to be an increase in the oil prices, which are hovering at nearly $125 per barrel (selling at $5 a gallon in the US and $8 in France), prices that have historically not been realized.

 America's oil consumption has over the Obama administration steadily declined under the administrations policy of reducing America's dependence on foreign oil reserves. Pump prices have been climbing and this has greatly unnerved the administration because of the upcoming election. The same applies to their Atlantic neighbor, the British administration of PM David Cameron. There was a recent article that indicated a direct correlation between pump prices and the voting in of public officials, and in this scenario Obama is in trouble.

"Make a list of the big issues in the world and put a check next to the ones that have an important energy component. The list is long: Iran; Iraq; the Arab Spring; terrorism; the rise of China; resource competition worldwide; the focus in our pivot to Asia on keeping open sea lanes for the shipment of energy through the Indian Ocean, Straits of Malacca, and the South China Sea; the future of the Japanese economy; our concerns about instability in Africa; the rise of the BRICS and other emerging powers." (David Rothkoph, Foreign Policy Magazine article - http://www.foreignpolicy.com/articles/2012/04/02/dear_ayatollah_khamenei_go_ahead_shut_down_those_straits?page=0,1)

African states have largely raised economic growth due to the commodities boom, largely spurred by China's growth. As the Chinese economic forecasts have been re-forecast-ed to signify declining economic growth rates over the next year, African countries will bear the brunt of declining economic growth too. When it comes to oil however, there is bound to be a drop in prices only when sanctions on Iran are lowered or when Saudi Arabia pumps more reserves to meet the demand brought by Iran.

Over the long term, oil exports from African countries may largely help to reduce the international demand. However, Africa's population shall continue to grow at an exponential rate, doubling in size by 2050 to 2 billion people, with the largest growth rates being witnessed in East and West Africa. This shall represent a huger appetite for oil and may lead to increased prices due to ncreasing demand. China's continued growth can also only be fueled by increased oil consumption and India's rise may follow a similar pattern.

Generally, there shall be an increased demand from the East for oil but a large decrease from the West. Western governments are pumping money into looking for newer technologies that rely less on foreign oil and more on new innovations. The oil economy shall continue to remain relevant especially to the East and Africa, and less so for the West. But as for now, oil remains the game changer in building and shaping economies that export it and also changes the politics of nations that are affected by the high prices of oil.