The decline in oil prices not only leads to huge decreases in the revenues of oil exporting countries, but also weakens these countries' economies, triggering serious social and political problems. Experts warn that in the event raw oil prices drop below $25 per barrel, the “red line” will be crossed. The fluctuations in oil prices have led to talks of “doomsday scenarios.” Taking into consideration that many of the wars in the 20
The situation is really very serious. Brent oil prices fell below $30 for the first time since 2004. Developments have no indication that the situation will be balanced any time soon. The Organization of Petroleum Exporting Countries (OPEC) is in the position of a neutral element. OPEC was never this fragile in its 55-year history. Whereas OPEC was first founded in 1960 to stop the drop in oil prices. OPEC was founded by Venezuela, Iran, Iraq, Saudi Arabia and Kuwait. The current decline in oil prices is nothing but the “economic” war between the oil exporting countries.
Oil-dependent countries like Russia, Iran, Iraq, Venezuela, Nigeria, Brazil, Mexico, Kazakhstan and Azerbaijan are those with the greatest loss from the fluctuation of oil prices. The economy of a country like Canada, which is a member of the “Rich Club” (G7), even had difficulty avoiding the stagnation last year that resulted from the decrease in oil revenues. The “Socialists,” which were in power for 17 years in Venezuela, lost the election.
If crude oil pried fall below $25 and this situation continues for a while longer, tensions will escalate in oil-exporting countries, particularly in Russia. The decline in oil revenues lead states to decrease their social expenditure and this mostly affects the low income group. Protests have slowly started in Russia. As for Azerbaijan, life has become more expensive with unease on a rise. The situation in Iraq, which is in civil war, is even worse. While Iraq loses a large part of oil revenues, the people are becoming poorer. The unemployment rate is heading toward 30 percent and warnings are being made one after the other of revolts starting in the country because of hunger.
Saudi Arabia, the lead actor in the decrease of oil prices is also on the threshold. While Riyadh is increasing production and reducing pries, its own economy is also suffering greatly. Tough times await the segments of the country that survive on oil revenues because of the budgetary deficits. It is unknown how long Riyadh, which is currently using up its savings, can continue this game. Although they have small populations, the situation is no different for Gulf's oil-rich countries either. It is suspicious whether Iran, which is about to get out of the economic and political embargo, can stop the deadly oil game.
In the event the decreases in oil prices cross the “red line,” a large region reaching from the Arabian Peninsula to Central Asia, South America to Africa, may witness more widespread, more severe revolts and clashes. It is not difficult to guess that radical, pro-violence movements will emerge strong from such an atmosphere. The suppression of the Arab Spring, killing all hope for a better future and stopping the influx of migration, may lead masses to uprisings never before tried. These developments may overflow their own regions and affect the world. The West may jump out of the frying pan and into the fire.
