Why is the oil price not about equilibrium?: An economic sociology account of petroleum markets

This opinion paper seeks to initiate discussion of the institutional and societal causes of oil price. On this basis, the social embeddedness concept is proposed instead of the frequently used producer-consumer juxtaposition. Observation shows no linearity between resource distribution imbalances and supply dynamics on the one hand and price on the other. As a socially endogenous factor, oil price generates practices and norms comprising benchmarks for resource valuation, stock market dynamics and risk aversion practices. A high oil price incentivises investments and inter-fuel competition, whereas a low oil price increases both political and market risks beyond the consumer-producer conceptualisation. Hence, it is argued that the notion of oil price affordability in energy security should be revised.