JUNE 16, 2005
Why the price of oil is important in motor sport
Crude oil prices have risen dramatically in recent months as the world begins to worry about the availability of oil in the future and the latest rises are thought likely to create inflation, restricting growth and make current governments very unpopular. The growth in demand for oil has come largely from China's rapidly-expanding economy at a time when few of the oil producers have extra capacity. Saudi Arabia has significant reserves but in this case there are worries about political stability. To make matters worse the oil companies are storing less oil than previously and so the market has become more volatile. The last fuel crisis in 1974 resulted in government action to reduce fuel use, including reduced speed limits, petrol rationing and a three-day working week for a period of time. It had a discernible effect on the number of companies operating in motor racing at the time because costs rose and revenues declined as potential sponsors saved their available money.
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