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Oil Price Volatility

Managing Oil Price Volatility: Bringing Latin America’s Lessons to the Pacific

Nicholas Keyes's picture

Pacific IslandsIt is well understood that climate change poses specific dangers for small island developing states. Less commented on is another threat: the vulnerability of these states to the repercussions of energy insecurity.  

Pacific islands are some of the most vulnerable.  Spread out over a huge expanse of ocean, pooling power among countries is not the option that it is for other regions.  Lacking fossil fuel resources, many of these states are forced to import oil products over long distances.  When prices spike, these countries are among the hardest hit.  

Global oil prices have now been volatile for ten years, compared with historical trends, with sharp volatility characterizing the markets since late 2007.  During this period, the World Bank has been engaged with developing countries to help them manage and mitigate this volatility so that it does not hamper the development or extension of energy services to poor communities.