To the editor:
In the last several weeks, we have seen a gradual yet fast paced decline in oil prices around the world. While falling oil prices may be good for the average consumer, it will have wide geopolitical and economic implications around the world.
If oil goes below $40 a barrel, it will have serious consequences. The Russian ruble is falling significantly fast and a sinking Russian economy poses a global threat.
As the price per barrel of oil drops, it also puts immense strain on U.S. oil production and associated companies. This directly affects local and state economies the worst, while placing many jobs in oil producing states at risk. Many programs from education to infrastructure are also paid for with large sums of this resource’s profits so as prices drop it makes it very hard for U.S. companies to compete with other places such as producers in the Middle East subsequently forcing them to slow output which in turn slows the source of money for these programs.
This is the first time oil has fallen below $60 a barrel since 2009 and many investors have shown reasonable fear as the price continues to slump. While some nations such as China and the U.S. will potentially benefit short term, other nations will see tens of billions in losses which can in turn lead to ugly situations in places like Venezuela, Iran, and Russia.
The I.E.A. backs these claims stating Venezuela and Russia are at risk for large social fallout in their nations if their currency and economies continue to plummet.
Any spike in unrest or any slowdown in the nation of Russia will directly impact the entire Russian region including nations like Kazakhstan where oil accounts for 65% of their economy.
In closing, while we as consumers enjoy low fuel costs around the holidays, we shouldn’t be blind to the potential serious social and economic impact that may be looming in far regions of the world.
Christopher MacNeill
Bristol
