The present high levels of fuel prices which at the time of writing is 120 dollars a barrel bears no relation to the cost of production. The fuel prices are purely market driven due to concerns over future supply exceeding demand.

The solution to the credit crisis is then to reduce demand for oil and increase production. When supply exceeds demand prices fall. Demand for oil is increasing worldwide both from western countries and the emerging dominant nations of India and China while production is not increasing at a rate to meet the increased demand.

Climate change is an issue that needs addressing medium and long term to reduce the demand for fossil fuel which could be in danger of running out this century. In the short term oil production has to be substantially increased to activate a fall in fuel prices.

The oil producing nations and OPEC in particular are less interested in increasing demand due to the extortionate prices obtained for oil when demand exceeds supply. Compared with a market price of 120 dollar a barrel the production cost of that barrel of oil is as low as just 2 dollar a barrel.

OPEC has been requested to increase supply and the response was negative.

The solution to restore confidence in the world economies is to request oil production is increased. If that request is ignored then further diplomatic discussions must take place to ensure supply is increased.

If diplomacy fails then negotiations must get tougher until a solution is found to increase supplies of oil. In the end game if the oil rich nations refuse to increase oil production then the diplomats should enforce production increases even if that results in potentially confiscating oil fueled investments worldwide and putting the billions raised back into the economies and the hard working people of this world.

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