Economics

Economics
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Over the years, the scholars in the field of international trade and commerce studies have tried to come up with theories that can explains the different scenarios that take place in these markets. The international markets are quite complex as there are a number of factors that affects the trade in the markets and the companies that are looking to venture into the markets have to oblige. The Lukoil is one of the largest privately owned oil and Gas Company in the world today, producing more than 2.1% of the crude oil found in the global market. Over the last two decades, the company has been rising to greater heights, thanks to the global strategies that it has employed in exploration, production, refinery and marketing. Lukiol directed most of these strategies towards the Russian market and a few other countries that neighbor Russia. The Russian reserves put on the global map, as one of the few countries that still some of the largest oil reserves in the wake of dwindling supplies (Flat World Knowledge, 2014). The company forerunners so the opportunities that lies within Russia and took it up, making one of the best decision that they made. The combination of the strategic company in a country that produces most of the oil that is use in the neighboring countries and the world over is paramount to the level of success the two entities have enjoyed for decades.
One of the international trade theories that can explain the Russian oil, the market and Lukoil, is the National Competitive Advantage. One of the key elements that support this theory is the fact that Russian has huge oil reserves compared to all of its other neighbors. The oil reserves are natural resources that put Russia on the global map atop all of the neighbors ('Competitive Advantage - The Drive for International Trade', 2014). When combined with the fact that Lukoil has advanced in its ability to explore, produce, refining, marketing and power generation through some innovative ways underlined by the company’s innovation policies, it makes the perfect match. In this case, the country has wealthy oil reserves and the company in question has the capacity to extract the oil, refine and market. This means that, the company and the country are able to sell their products at the best of prices regardless of the price wars in the oil industry, as they produce and refine with the least cost and ensure the highest quality. At the same time, the company has the ability to produce a variety of products to satisfy the varying need of the market.
Oil prices in the world market are affected by a myriad of factors that play out within the suppliers and the demand in the market. However, it is not always as simple as demand and supply effects that change the current prices of oil. Politics and the economic activities within the global market play a much greater role than most of the other factors. The economic activities of the global market, relates to how well the economies in the world are doing. In the recent past, there have been a couple of other economies that have been rising relative to the advanced economies. The rise in the economic factors across the globe, with close reference to the emerging economies, has led to the increase in the pump prices. This is because, there is a rise in the demand of the oil and the suppliers wanted to take in more profits relative to the low demand seasons. Political activities in any given country have diverse effects on the economy, at the same time the effects of political activities in the oil producing countries have greater effect on the prices of oil in the global markets. A good example is the case of the war in the Middle East that has led to rise in prices of the oil prices across the world. As the supplies falls from these countries, the prices of oil increases...