State hedging of oil price risks

OK. So what it seems to come down to is this: the oil price cannot be predicted years in advance with absolute certainty. Let's agree that the price of oil varies from time to time. So what do you do? Do you give up any aspiration because uncertainty equals hopeless, unmanageable chaos? No. Lack of absolute certainty is nothing like the same as being powerless. That's the counsel of the coward. Most independent analyses of the world economy, and the oil industry's own spending, suggest the price is only going to go up. I remember a few years back someone (I think it might have been "Doctor" John Reid) wisely pointing out that the days of the giddy heights of $50 a barrel would never be seen again. It's now $91.40. That's in the midst of a world recession. As and when the economy recovers, demand for oil will grow. New discoveries, in the US and elsewhere, are expected to "keep a lid on the price" , as a welcome a counter-balance against a price explosion.

Still, you can't know for sure, I accept. So what does the sensible government do?

Simple. It hedges.