What are the Possible Negatives of Lower Oil Prices?

Oil prices have been tanking over the past few weeks, which is great for the American people, because gas prices have been hitting lows. Personally, I love the situation. As a high school kid with a car I need to save all the money I can, and with gas prices at $2.50 is great for my (very tight) budget.

There can be downsides to goo things though and this is a prime example. There are many worldwide economies that are centered around oil selling for at least $77 a barrel, and that price is to keep them barely going. Saudi Arabia is a perfect example. They need oil to be at $90 a barrel in order to keep a strong economy. We all know how volatile the Middle East is at the moment. What will happen if the Saudi economy collapses? I can’t be sure, but my guess is that it wouldn’t be goo.

oil_drums1One possible outcome: ISIS will expand into Saudi Arabia. This would not be good to say the least. Saudi Arabia has purchased over $82 billion worth of F-15SA aircraft (a modification of the F-15E). The F-15 is the most successful fighter aircraft ever. It is also a very complicated aircraft, but it doesn’t matter. If a terrorist group possesses F-15 fighters it is not good for anybody. Israel also owns a large number of F-15A aircraft would be able to counter the ISIS threat with great ease, so this threat is nonexistent. But the Saudi economy should be the main concern. If ISIS captures Saudi Arabia America and Europe will lose a major supplier of oil, and prices will skyrocket.

Another economy that is centered around oil is the Russia. The Russian leadership has implied how desperate they are for a rise in oil prices, Vladimir Putin has said that the world economy cannot be sustained with oil prices being below $90 a barrel.

Russia is the world’s eighth largest economy, and despite attempts to isolate Russia, if their economy does collapse, there will be worldwide ramifications. Imagine a second Nazi Germany if you will. Russia is on the brink of economic collapse and if they do collapse again the Russian people will refuse the counsel of the West and traditional government values. What will be their new government? They will go to one extreme or the other. I predict that there will be either a new communist government or a fascist government; either of these systems will result in a massive propaganda campaign against the West (RT won’t be anything in comparison). In all likelihood the Russian people will choose another communist government (as there is still a fiery hatred of fascism as a result of World War 2).

Remember to be grateful for the gas prices we are seeing right now, and beware of the possible ramifications of lower gas prices. Brace yourselves my friends.


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