Mounting Danger From Cheap Oil

Countries with as little in common as Ecuador, Saudi Arabia, Nigeria, Russia and Iraq are being severely stressed by the continuing fall in the price of oil, because they all have one thing in common: They are net oil exporters whose economy depends on it. What has been their economic lifeblood has turned into an “ever-cheaper economic curse,” says an article in the New York Times. Saudi Arabia and other Gulf State exporters, for example, are facing fiscal deficits for the first time in decades. In other countries, the problem is more immediate, taking the form of street demonstrations and continuing popular unrest. While the price of oil has been falling for months, it was widely assumed that it would soon reach a low and begin to recover, but with the economic crisis in China that assumption is looking shaky. It’s seeming more likely that prices will remain low for a long time, and if the price of oil stays below $45 a barrel, says one commentator, that’s “a red flag for stability issues across the oil producing world.”