Impact of Continued Global Low Oil Price

Economists say that “While cheap oil is not a bad thing per se, it can trigger substantial economic disruptions. The United States is suffering job losses in the oil sector that ultimately outweigh the benefits of cheap energy.” Countries that depend on oil exports for most of their economy like Venezuela are in serious difficulties. Even Saudi Arabia is facing economic chaos with long term low oil prices. Predictions that oil will stay in the $30 range for a long time will force Saudi Arabia to change its policy or make “major social and economic changes.” 15% of Saudi’s population is Shia minorities who live in the oil producing part of the country, “any Shia unrest could quickly destabilize the entire country.” Saudi has introduced measures to stem the economic lost by “cutting fuel subsidies, introducing sales taxes, issuing sovereign debt, and dipping into its cash reserves” all of which will increase stress on the Shia minority.