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The reason that the price drop is such a big deal is that there are many economies of the world that are highly dependent on oil as the main source of revenue. Today, the price of oil fell again and is roughly around 65 dollars a barrel on the global market. The oil economies of the world need oil to be well over 110 dollars a barrel in order to even break even with national fiscal commitments. In Iran, oil needs to be at 135 dollars a barrel. In Venezuela, oil needs to be at 120 dollars a barrel and in Russia it needs to be at about 100 dollars a barrel. See here for more details and source of the data.
The low oil prices have leaders in these oil-rich nations reeling. Some, particularly Venezuela and Iran, have depended on single industry economies for decades without serious diversification and are now feeling the pain. Some have argued that the Russian invasion of the Ukraine was really about drawing attention away from Russia's poor economy.
In Venezuela, the leaders have blamed the US fracking industry and Obama. Venezuela's leaders have been speaking vocally and often about the environmental dangers of fracking in recent weeks. It is hard to take them seriously when they have an extremely poor environmental and safety record in oil extraction. Last week, Venezuela's Minister of Foreign Affairs was unable to budge OPEC on it's output and price. As a result, some are calling on his resignation.
In Europe, Russians are allegedly funding protests against fracking in Romania to try to turn public opinion away from this approach to energy production. The New York Times has an interesting piece on it today.
My assessment is different. In my read of it, the Saudis and other Gulf oil states are trying to lower the cost of oil to drive the fracking and renewable industries out of business. By keeping the cost of oil low, it is putting out of business many incipient fracking and renewable industries worldwide. While it is always convenient to blame United State's Policy, OPEC is the one that is responsible for setting output.
But who knows! There is no doubt that oil prices are extremely low right now and that nations around the world that are dependent on oil extraction as their main economic activity are hurting.
What's interesting in a sustainability context is that low oil prices are hurting not only the fracking industry, but also the renewable energy industry. The question is really who and what will be standing when prices go back up.
We seem to be in the midst of a major geopolitical and industrial shakeup.