Lower oil prices- leading to falling petrol prices have been great for Western consumers but are they also a secret US weapon against Russia?
That’s the conclusion drawn by New York Times columnist Thomas L Friedman, who says the US and Saudi Arabia, whether by accident or design, could be pumping Russia and Iran to brink of economic collapse.
Despite turmoil in many of the world’s oil-producing countries – Libya, Iraq, Nigeria and Syria – prices are hitting lows not seen in years, Friedman writes.
Analysts identify a number of possible reasons for the steep drop – increased US production, slowing economies in Europe and China and steady production from the Organisation of Petroleum Exporting Countries (Opec).
Rather than look at the causes, however, Friedman says to look at the result – budget shortfalls in Russia and Iran – and what it means.
Who benefits? He asks. The US wants its Ukraine-related sanctions against Russia to have more bite. Both the Saudis and the US are fighting a proxy war against Iran in Syria.
“This is business, but it also has the feel of war by other means: oil,” he writes.
As for Iran, he writes, an oil price of anything less than $100 (£62.41) a barrel will create onerous budget deficits and undermine the nation’s position in ongoing nuclear negotiations with the West. The closing price on Wednesday was $81.40.
One can only hope that the oil sheikhs will come to their senses, curtail production and stabilize prices at least at $90 per barrel”In Russia, the media have taken notice.
“The Russian economy’s dependence on energy resources, gas and oil first and foremost, is often compared to drug addiction; people say that it is ‘on the oil needle’,” write the editors of Nezavisimaya Gazeta (translated by BBC Monitoring).
“In this case, dealings to decrease oil prices on the global market can justifiably be compared to triggering agonies that are no less painful than withdrawal from a drug. And this is being done with obvious geopolitical aims to undermine the country’s economy and its influence on the global arena.”
Nikolay Makeyev and Konstantin Smirnov write in Moskovskiy Komsomolets that they fear a more severe replay of the 2008-09 economic crisis: “One can only hope that the oil sheikhs will come to their senses, curtail production and stabilise prices at least at $90 per barrel.”
Friedman’s neo-Cold War theories aren’t the only speculation making the rounds at the moment, however. For some analysts, the oil drop has everything to do with increased US production threatening Saudi Arabia’s standing as the pre-eminent oil-producing nation.
That’s changed, however, with the 70% increase in US production over the last six years.
What’s clear is that the sharp drop in oil prices is creating very distinct winners and losers on the world stage. What’s not so clear is who, if anyone, is pulling the strings.
It’s human nature to speculate about the schemes of behind-the-scenes players when the stakes are so high. It can also be comforting – a much preferable alternative to a system where the health of nations is determined by the random permutations of fate and the chaotic fluctuations of an uncontrollable market.