Emulate Japan to cope with oil shocks

By Dilip Hiro

With the price of oil rocketing to the unprecedented level of US$130 a barrel and more, there is a talk of another oil shock. Unlike past instances, this one is unlikely to subside and may indeed keep intensifying. The only way out is for Western nations, the gluttonous users of petroleum, to cut their consumption and emulate Japan in its consistent drive for energy efficiency and alternate sources.

The present explosion in oil prices, the fourth of its kind, is different from the previous ones in 1973-74, 1980 and 1990-91. The earlier oil shocks were caused by interruption of supplies from the Middle East, respectively due to the war between the Arabs and Israel, the Iranian revolution, and Iraq's invasion and occupation of Kuwait. Once peace returned, the new order became established or the invader was expelled, supplies returned to normal.