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 was formed through the mixture of plants, algae, and sediments in shallow seas under high pressure. Petroleum is mostly recovered from oil dri ...
in an economy. Generally, this short period initially brings economic benefits, in terms of increased
GDP growth
Economic growth can be defined as the increase or improvement in the inflation-adjusted market value of the goods and services produced by an economy in a financial year. Statisticians conventionally measure such growth as the percent rate of ...
, but might later lead to a
resource curse
The resource curse, also known as the paradox of plenty or the poverty paradox, is the phenomenon of countries with an abundance of natural resources (such as fossil fuels and certain minerals) having less economic growth, less democracy, or worse ...
.
History
Some important oil booms around the world include:
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Mexican oil boom
The Mexican Oil Boom was an oil boom from 1977 to 1981 which eventually led to a disastrous crash that lasted for most of the 1980s, driving the economy to a payment default and a significant deficit correction as oil prices fell.
Pre-Boom peri ...
(
Mexico
Mexico (Spanish: México), officially the United Mexican States, is a country in the southern portion of North America. It is bordered to the north by the United States; to the south and west by the Pacific Ocean; to the southeast by Guatema ...
, 1977–1981)
*
Pennsylvanian oil rush
The oil rush in America started in Titusville, Pennsylvania, in the Oil Creek Valley when Edwin L. Drake struck "rock oil" there in 1859. Titusville and other towns on the shores of Oil Creek expanded rapidly as oil wells and refineries shot up ...
(
United States
The United States of America (U.S.A. or USA), commonly known as the United States (U.S. or US) or America, is a country primarily located in North America. It consists of 50 states, a federal district, five major unincorporated territorie ...
, 1859)
*
Texas oil boom
The Texas oil boom, sometimes called the gusher age, was a period of dramatic change and economic growth in the U.S. state of Texas during the early 20th century that began with the discovery of a large oil reserve, petroleum reserve near Beaum ...
(United States, early 1900s–1940s)
*
Calgary oil boom (
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
, 1947)
*
North Dakota oil boom (United States, 2008–2015)
Consequences
According to the
Dutch disease
In economics, the Dutch disease is the apparent causal relationship between the increase in the economic development of a specific sector (for example natural resources) and a decline in other sectors (like the manufacturing sector or agricultur ...
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 (; ; snq, Ngabu), officially the Gabonese Republic (french: République gabonaise), is a country on the west coast of Central Africa. Located on the equator, it is bordered by Equatorial Guinea to the northwest, Cameroon to the north ...
, the country showed symptoms of the Dutch disease,
[
] while oil-producing
Equatorial Guinea
Equatorial Guinea ( es, Guinea Ecuatorial; french: Guinée équatoriale; pt, Guiné Equatorial), officially the Republic of Equatorial Guinea ( es, link=no, República de Guinea Ecuatorial, french: link=no, République de Guinée équatoria ...
didn't.
See also
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Energy crisis
An energy crisis or energy shortage is any significant 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 particular, those that supply n ...
*
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
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1979 energy crisis
**
1980s oil glut
References
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