How the oil-price slump is reshaping the world
The map aboveshows the world's biggest oil importers (in yellow) andexporters (in dark blue). Unsurprisingly, with the price of Brentcrude now below $50 a barrel, compared to $100 just 18 monthsago, exporters have been hit hard by the slump.
Saudi Arabia which produces oil at dirt-cheap prices butneeds a high price per barrel to sustain current public spending has been forced to raise money on global bond markets forthe first time in eight years. Other Middle Eastern economieshave been hit just as hard, while Russia, one of the largest oilproducers in the world, is now in recession and could staythere for quite some time if the oil price drops much further.
Shortly before the slump, state-owned Gazprom tied itself intoa £256bn 30-year oil-supply deal with China, which offers it noprotection against a low oil price. Even at current prices, saysthe FT, the project is unprofitable. And Norway, which owns theworld's biggest sovereign wealth fund, built on oil profits, ishaving to dip into its savings as it faces a slump that is likely tocost the country more jobs than the 2008 recession.
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None of this bodes well for political stability in the world's more volatile regions. However, there have been plenty of winnerstoo. Large importers of oil including China, India and Japan have benefited from falling costs, which in turn boost consumerspending.
The US has reduced its dependency on imported oiland is even starting to loosen its long-held ban on exporting oil,as a recent deal to swap supplies with Mexico demonstrates.On the other hand, there's no doubt that the plunge has hit thefracking industry hard, with companies slashing spending.
By John Fitzsimons Published
By Nicole García Mérida Published