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Falling oil prices and global instability
Almost a year back the crude oil was trading at roughly 103 USD per barrel at international commodity exchanges, now it is trading roughly at 42 USD per barrel with some variations; WTI crude oil was trading on Friday at 42.56 USD a barrel and Bent Crude oil was trading at 47.56 USD a barrel the same day. This is a huge drop in the earnings of those nations whose main source of income is the export of oil and such also include countries like Saudi Arabia.

The fall in global oil price is primarily due to over production in the native oil markets and discovery of massive shale oil fields in the West and recourse to commercial fracking there and derivatively due to slackening of demands and slowing down of major economies. The expected return of Iran back to oil markets fully would push additional downward pressure on the oil prices. The Russian Federation is also facing heat due to depression in oil markets and is increasing its arms exports to lower down the budget deficits and revive the stagnant economy.

It is the individual selfishness to drill out more oil to meet their requirements but overall it is the overcapacities which are driving oil prices downward crazy. The depression has sound economic reasons to be sustained and is expected to continue for the time being: if the OPEC increases the price of crude oil at this moment of time, the West will increase the production of shale oil and the oil importing nations among the Rest may not buy the 'costly' OPEC oil. The lesser Western dependence on fossil fuel is also a reason for weak demands for it.  

The market forces will thus bring down the OPEC oil prices because of demands not matching up the supply. If the OPEC increases the oil price with lowering the drilling capacities it is going to loose valuable petro-dollars in short terms. There may be political reasons as well for OPEC countries not raising the base drilling price. However, I do not see depression in oil markets as permanent and some chaotic and unexpected global events may help the black gold prices going upwards sooner but rather than the later. The low oil prices may also put downward pressure in metal and other mineral markets. Thus, countries exporting natural resources may suffer for the time being and the West may benefit because of that.     

The fact is that currencies are hitting low and loosing their sheen and thus many stock markets would be in bear for a longer period of time with downs more frequents in frequency. The low interest rates as well as quantitative easing may not be able to revive economies and global consumption may decrease bringing many economies back to recession. This could put additional downward pressure on oil and other commodity prices. The world then as a consequence would almost completely belong to capitalists.

But then there is a problem and that is that that consciousness is sharpening with time becoming edgy, dragging, conflicting and competing and still rising and in this increasingly interconnected world people do try to equate themselves with rich and powerful whether they really deserve it or not. These facts combined with the instabilities prevailing in many Middle Eastern and Latin American countries do not bode well for the stability of global politics and global political economy. The world should brace itself for many upheavals in Asia, Africa and Latin America, most notably in the Middle East and the North Africa.

The fact is that contrary to common belief the low priced oil would become more valuable and more precious and there would be contest in many countries to take control of oil fields. This would add to the existing instability in many oil-rich nations fanning the passions and inflaming the communist ideology. Many people may demand unreasonable things as well in many societies. Now in those countries where that contest is absent or minimal the government even then would find it hard to provide subsidies to its population so as to calm dissent and unrest and to support social security and health services appropriately. This poses a universal global problem for many Middle Eastern and the North African countries.  

Thus, national central banks as a defense mechanism would print more causing to inflation and devaluation of currencies. However, it would not be survival of fittest but instead dependence on the richest and the most powerful. As a consequence after Congressional approval the United States Treasury and the Federal Reserve Bank may resort to 'surrogate' printing. Surrogate printing, as per me, is a process whereby after buying treasury instruments and other debts of failing economies in big numbers, the duo would print on behalf of them if those nations' economies go bust. But the two mighty institutions could only print in USD and shall have to share the printed capital with the relevant national economies. 

With rising consciousness the people may feel more frustrated and dissatisfied but elitism in all countries universally would increase. The gap between rich and poor will increase and dispossessed people would take recourse to politics. The troubled countries' people may as a defense mechanism; for the betterment of selves, resort to Western universalism though such would only be a temporary process. In Iraq and in many Latin American countries people are protesting against poor social and physical infrastructure and corruption. These protests could be contagious to other Islamic and Latino countries. The most notable cases in the region are Pakistan and Afghanistan

Thus, globally demands for adult suffrage will increase but taking harsh realities into account segmentation will also increase. There will be no pure thoughts in global social markets except in the United States and Saudi Arabia. It will be the hybridization of human thoughts and beginning of demeaning of modern consciousness.

Thus, idealism would go away for a vast majority of people in most parts of the globe and it would be return of basic instincts, sure, with cleverly articulated jabs. There would be new normal with new lows and highs in many fields all over the globe. The governance would increase globally without any exception though in the West private hands would gain upper hand. Thus, a skewed and distorted globe due to economic realities is expected in shorter term. The instabilities in the Islamic countries would worsen migrant crises all over the globe.

However, the oil prices may climb up after the Obama Presidency or even before the end of it. Right now there is no such sign in the sight though. The West can enhance its subsidies due to the falling oil prices though its oil majors would suffer the loss as well and its subsidy bills are expected to shot up in the coming months. However, the oil and other natural resources export-dependent countries will find it difficult to continue meeting their social and governmental obligations.

Editorial NOTE: This article is categorized under Opinion Section. The views expressed in this article are solely those of the author and do not necessarily represent the views of merinews.com. In case you have a opposing view, please click here to share the same in the comments section.
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