8 ms·
Anyone who knows this stuff care to explain what the consequences of this are likely to be?
by s_kilk 11y ago
Anyone who knows this stuff care to explain what the consequences of this are likely to be?
- baq 11y agoyou could probably write a phd or a book about this topic; cheaper energy benefits advanced economies but hurts resource-based economies - e.g. compare USA and Russia. Russia is suffering quite a bit whereas most of the USA are probably happy. you can also check who are net importers and net exporters of oil, etc., and those would be only the first-order consequences. what happens after the economy feedback loops start being impacted is hard to tell...
- alkonaut 11y agoDomestic political turmoil in the countries whose budget depend largely on the oil price: See e.g. election upset in Venezuela, Russia aggressive in middle east potentially to overshadow news of worsened economy at home, Turmoil in Nigeria etc). Internationally it means states like Russia won't have the same economical and political clout they had at $100+, so instead will rely on other means to throw their weight around, such as military threat. Economically it's good: lots of the saved money ends up in the hands of consumers. Environmentally, it's less good of course. Alternative energy will be less attractive in the near future. So it's not all rosy, but the downsides are mainly due to a falling oil price, rather than a low one. The volatility upsets budgets, which causes problems.
- joakleaf 11y agoEconomically not all good. Oil companies depending on higher prices (most of them), will start having to reduce number on employees, or, worst case, go bankrupt and take financial institutions with them (because of debt).
- alkonaut 11y agoAs with anything there are winners and losers. Most companies are not oil companies, most people are oil consumers and not employed by oil companies. The "mostly good" here is of course for an average company (oil buyer) or average consumer (employed by a non-oil company, and an oil buyer), or even an average country (net oil importer).
- Apocryphon 11y agoPolitically, it's pretty scary when petrostates get their economies disrupted...
- sambeau 11y agoHere's one: Oil price slide may force new Russian budget, Medvedev says http://www.bbc.co.uk/news/business-35302509 http://www.bbc.co.uk/news/business-35302509
- gaius 11y agoThe Scottish independence movement will quietly slink away, since their plans were predicated on $100/barrel!
- mrfusion 11y agoExplain.
- gaius 11y agoGovernment spending in the UK is controlled by something called the Barnett Formula, which presently results in about £60Bn/year being transferred from England to Scotland. Should Scotland have become a separate country, this river of money would have run dry overnight. The Scottish Nationalists calculated that with oil at $100/barrel, they could manage without it. However a) the price of oil collapsed and b) the part of Scotland that actually "owns" most of the oil, the Shetlands, was adamant that it wanted to stay part of the UK. So 28 out of 32 voting districts in Scotland, decided the present arrangement suited them well enough!
- tonyedgecombe 11y agoI don't think anybody sensible believed either side on what the future value of Scottish oil would be.