Fear of shortage of supplies leads to price increase. Since the crisis

Hi longhaul123,
The correct answer choice is the one which if we negate, will break down the conclusion.

* fear of shortage -> price increase
* crisis in Libya -> oil price increase
=> crisis in Africa -> fear of shortage -> increased price of oil in West

Assuming the African oil producing nation satisfy only 49% and not the majority won’t beak down the conclusion. In fact it doesn’t matter if African oil supply majority or minority of western region. It is not stated in the passage what influence does either case have on the West. Therefore, A. can’t be the correct assumption.

On the other hand, at answer C. If we assume that the current African crisis won’t instill fear of shortage, it clearly breaks down the conclusion. No fear of shortage -> no oil price increase can be predicted.

Hope it helps.
Reni


Sent from my iPad using GMAT Club Forum

I have one question here. So can one of the assumptions of the author be that the western countries and the African oil producing nations are related to each other, meaning that the premise talks about the oil producing nations in Africa where as the conclusion is about the western regions and so the change in price in the western region should be connected with the African oil producing nations.
Please correct me if I'm wrong. Thank you

Fear of shortage of supplies leads to price increase. Since the crisis of Libya started, the price of oil has gone up.
Therefore, with the crisis spreading to more oil producing nations in Africa, the price of oil will rise further in the western regions.

A. African oil producing nations satisfy majority of the oil needs of the west.

B. The crisis in Libya has impacted oil production in Libya.

C. The current crisis in African nations that produce oil will instill fear of shortage of oil in the western regions

Analysis
e-gmat in their solutions video state that cirisis in libya -> oil price has gone up, this increase is due to fear of shortage of supplies. Crisis in libya could have started, and production could have dropped drastically and oil price could have gone up due to reduced supply.

Can one determine that the crisis in libya leading to increase in oil prices is because of fear of shortage of supplies? How is it possible to relate the two statements in the passage and make this conclusion?

Reasoning for the argument: -
1. Premise: - Fear of shortage of supplies - > Price increases
2. Premise: - Crisis in Libya - > [ Fear of shortage of supply of oil from Libya] - > Oil price increase
3. Conclusion: - Crisis spreading in African nations -> [Fear of shortage of supply of oil increases in western regions] -> Price of oil goes up in western regions
[] - > assumptions

IMO C

In premise 2, how is that you arrived at fear of shortage is why price of oil in Libya is high when the crisis started?

Posted from my mobile device

So basically in CR we don't doubt the premise. Everything in the premise is 100% true if it is stated as fact.

Immediately after reading I came up with this assumption
-- Western Regions depend on Oil from Africa.

If the above assumption is not true that would mean that even if there is a huge oil crisis in Africa, Western regions won't fear it as they may be producing oil themselves or taking it from the Middle East.


This is the conclusion of the argument -- the price of oil will rise further in the western regions.
This is the fact that cannot be doubted -- Fear of shortage of supplies leads to price increase.

Going to the options

A. Incorrect because of the strong word majority.
B. Incorrect-- The crisis in Libiya could have just caused oil companies to stop exporting for a while. This would still cause problems for other countries depending on the Oil.
C. Correct as per the pre-thinking

Hi Rohit,

I agree with what you are saying but my query is how is that you were able to make the transition from state that the crisis in libya which led to increase in oil prices is because of the fear of shortage? That is not stated in the passage is it?

Crisis in Libya could have started and production could have dropped drastically and thereby oil price could have gone up due to reduced supply vs demand, it need not be because of fear. You can have any other reason for prices to go up in Libya other than fear of shortage. How can one determine that the crisis in Libya which led to increase in oil prices is because of fear of shortage of supplies?

Thanks

This is the point of the argument right?
If this was not true then why would they mention the line about fear increasing oil prices.

Given :: Fear of shortage = Oil Price Increase

Libya Crisis = Lower Oil production[ whatever the reason XYZ doesn't matter]

Lower Oil production = Fear of shortage in Western nations who depended on Libiya for Oil

Fear of Shortage = Increase in oil price

[Fear of shortage of supplies leads to price increase. Since the crisis of Libya started, the price of oil has gone up.] This entire part has to be trusted 100%. Do not apply logic until this point yet. Do not find gaps in these sentences either. Moreover, this is not an official question so the wordings are not that detailed as OG arguments. This is just for teaching the basics.
If you find any official question with such confusion, I might be able to help better.

Please kudos if this helped

Hi, 

In this question the falsification statement is given as :
Prices of oil will not increase in Western region when crisis spreads to other oil producing nations in Africa.

For this to happen, I came up with 2 scenarios:

1. Prices will not increase in Western region if there are other oil producing nations (e.g. OPEC countries) are supplying oils to Western region
2. Western region is not dependent on fuel produced by African nations (e.g. They are producing renewable energies)

The first option is : 
- African oil producing nations satisfy majority of the oil needs of the West.


If I negate the first option then my assumption would be prices will not increase in Western region if there are no other oil producing nations (other than Africa) which aligns with first option that African oil producing nations satisfy majority of the oil needs. My question is why option (A) is wrong?

Also if we negate the statement African oil producing nations satisfy majority of the oil needs of the west. then it'll break the conclusion that:
African oil producing nations satisfy not majority (say < 50%) of the oil needs of the West then our conclusion that crisis spreading in more oil producing nations in Africa will cause the prices to go up

​​​​​​​cc: egmat