In my earlier post about the affects of the dramatic drop in in oil and nat gas prices, I didn't discuss what may be the biggest outcome of all; societal and governmental collapse in different countries across the globe. There are many countries that are dependent on oil income and are suffering badly. Will their governments fail and their societies disintegrate?
Venezuela is in dire straits as their oil exports have collapsed and their government is in crisis mode. Hyperinflation, shortages of food and other staples, people in the streets. Could get ugly.
Brazil is also in bad shape as they have spent billions developing off shore oil and now have no market for it. Their currency is in free fall and the government is shaky.
Ecuador, Mexico, and even Canada are feeling the financial pinch but will survive with some difficulties.
Overseas may be even worse. Countries with historically weak governments like Liberia and Nigeria are losing oil income and will have more trouble. These countries are infiltrated by various terror groups, some affiliated with ISIS. Russia depends on oil and gas and the people there are suffering from both the commodity price fall and from sanctions for Putin's Ukraine land grab. He doesn't appear to be in any danger but things can change.
Then there are the ME oil exporters like Saudi Arabia, Iran, Iraq, Qatar, UAE, Kuwait, and more. A prolonged price depression will affect each of these in various ways. And terror groups like el Qaeda and ISIS are ready to take full advantage of any opportunity presented.
While it is easy to say 'Good for them' to some of these screwed up countries from Venezuela to Russia to Iran, the unknown consequences need to be considered. If prices stay this low for a couple of years, we may witness some serious reshuffling of the global deck of cards. And that reshuffle may affect us all.
Venezuela is in dire straits as their oil exports have collapsed and their government is in crisis mode. Hyperinflation, shortages of food and other staples, people in the streets. Could get ugly.
Brazil is also in bad shape as they have spent billions developing off shore oil and now have no market for it. Their currency is in free fall and the government is shaky.
Ecuador, Mexico, and even Canada are feeling the financial pinch but will survive with some difficulties.
Overseas may be even worse. Countries with historically weak governments like Liberia and Nigeria are losing oil income and will have more trouble. These countries are infiltrated by various terror groups, some affiliated with ISIS. Russia depends on oil and gas and the people there are suffering from both the commodity price fall and from sanctions for Putin's Ukraine land grab. He doesn't appear to be in any danger but things can change.
Then there are the ME oil exporters like Saudi Arabia, Iran, Iraq, Qatar, UAE, Kuwait, and more. A prolonged price depression will affect each of these in various ways. And terror groups like el Qaeda and ISIS are ready to take full advantage of any opportunity presented.
While it is easy to say 'Good for them' to some of these screwed up countries from Venezuela to Russia to Iran, the unknown consequences need to be considered. If prices stay this low for a couple of years, we may witness some serious reshuffling of the global deck of cards. And that reshuffle may affect us all.
