All But Two Oil-Producing Nations Are In Deficit
Two years ago everyone was worried about rising out prices. Now we’re distressed over falling oil prices. Seven of the 12 members of OPEC fail to balance their budgets when prices are below $100,” reports the Economist. “Last month Venezuela, a particularly inefficient member of the cartel, saw its bonds downgraded. One non-OPEC member in particular is in trouble: Russia. Economic growth is already poor. Further drops in the oil price could be very painful. After all, oil and gas make up 70% of Russia’s exports and half of the federal budget. Will Saudi Arabia come to the rescue? It is the largest oil exporter and if it cut supply, prices could rise again. But this seems unlikely. The Kingdom is in the midst of a big fiscal boom as it tries to diversify its economy and improve living standards.” But it sure is nice to be buying gas for less than $3 a gallon.