Friday, December 19, 2008

Oil's Volativity Knife Cuts Both Ways

After thrashing the big oil-consuming economies on the march, and final leap, to nearly $150 this summer, oil's drop below $60 ... $50 ... $40 in late 2008 is scaring the dickens out of the largest oil-selling nations. This includes the OPEC cartel countries and other less-than-friendly places like Russia, Iran and Venezuela, who approved mega projects and payrolls under the assumption that expensive oil was here to stay. Now they're looking into the abyss as the global economic downturn settles in. 

Here's one account of the impact on "let's use energy as a weapon" Russia. Now the gun is pointing right at the heart of its fragile economy, and it's putting the Putin government under increasing pressure. Beyond fossil fuels it has few other wares to sell, excepting tanks and vodka. And, at home anyway, vodka sales are tanking.

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