Why we should beware the dawn of cheap petrol | Paul Stevens

The crash in crude oil prices has huge implications for geopolitics, climate change - and even our pensions

It's been many years since the motorist had such a warm feeling at the petrol pump. Whoever thought they would be able to fill the car at prices as low as 90p a litre? Take advantage; fill up that tank. But don't delude yourself that this is an unalloyed benefit. Instead be aware of the dynamic that has delivered cheap petrol to your tank, and of its serious implications.

How did we get here? Since June 2014, the price of crude oil has fallen by over 70%. The reason is supply and demand, and the economics of oil markets. From the start of the Arab spring uprisings in Tunisia in January 2011, oil producers in the Middle East and north Africa sought higher oil revenues to keep people off the streets and out of the squares. That required higher oil prices - which for some time they managed to achieve. From 2011 to June 2014, prices averaged at $97 a barrel. The shale gas revolution in the US also had an impact. Production there increased by almost 5m barrels a day between 2008 and 2015 - unprecedented in the history of the industry. You don't need a Nobel prize to realise that high prices in a market so oversupplied with oil were simply unsustainable.