A global energy crisis looms large, with crude oil prices hovering over the $111.80-per-barrel mark, which it hit on March 17. It later fell to $105.11. With international crude oil prices shooting through the roof, the basket of crude oil that Indian refiners buy too recorded a record high of $101.2 per barrel.

On the backdrop of a global meltdown, the rise of oil prices is a cause for concern. The spiraling oil prices will derail a booming economy if not checked.

So why are oil prices soaring like crazy? Will there be some respite in the near future? The answers are disturbing. . .

The fall in the dollar rates is just one of the factors that has led to this astronomical rise in oil prices. A weaker American currency tends to increase the demand for dollar-denominated oil as it becomes cheaper for buyers using stronger currencies.

Oil prices are also heading higher because investors are seeking a safe investment for their cash amid fears of rising inflation and a US recession, analysts said.

Political tension in Kenya, Algeria and Pakistan as well as the threat of US sanctions against Iran earlier this year also aggravated the situation.

Threats to oil facilities in Nigeria -- the world's eighth largest oil exporter -- have also been responsible for the oil price hike. The attacks from rebels in the Niger delta, demanding more control over oil reserves led to shutting of many oil facilities in 2007. Militant attacks in Nigeria's main oil city, Port Harcourt also hit supplies. Nigeria is also likely to witness more violence as peace talks between the government and rebels have failed.

Text: Manu A B