PER 2015
Finally, what about OPEC? Except increasing production in US and slowdown of demand from China, another major reason of the falling oil price is the decision of OPEC to not cut its supply to push up oil price. The decision is backed mainly by Saudi Arabia and its brothers in the Gulf Cooperation Council. The Saudis are willing to see a slack oil industry in the US, and the economic downfall of Russia who provides vital supports to Assad regime and Iran. Meanwhile, its own finance can cope with the current oil price, so it seems like a straightforward decision. For Iran and Venezuela, however, things are totally different as they are desperate to get the oil revenues, especially in Venezuela when the popular political correct socialists have divided everything to the poor in the country and its terrible economic situation
after “there is no money left”: huge debts which few international investors would speculate the government to have the ability to pay, massive currency depreciation, people queueing in front of shops for milk and bread at 5am. Even towels and condoms are sometimes out of sale! Unfortunately according to OPEC charters, the decision of common oil policies can only be made with the principle of unanimity, so Saudi
Arabia has the veto power on this issue. It is also interesting to see the stance of Iraqi government on this issue, as they would want greater oil revenue to better finance the fight against Isis, while some would think the falling oil price can limit the oil income for Isis on the black market, as they have taken a large part of oil fields in Iraq and Syria and sell oil with a discount price. There is no doubt that oil can exert great influence on our lives. Oil means money, oil means power. It will continue to influence global economy and geopolitics as long as we could not find an alternative raw material. It is, however, important not to overestimate the power of oil. This is the case when some claimed the Iraq War was a war solely on American’s greed of Iraqi oil, when the total cost of war and aftermath occupation probably worth more than the total crude oil reserves in Iraq. It is similar to the case of nuclear confrontation: everyone knows it is powerful, so everyone would be extremely cautious to use the power. In the end, we should fight for better political institutions and economic infrastructures, not for another extra barrel of the black gold. References and further reading:
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