What Happens when the Oil Economy Fails?

The continuing low price of oil is leading to economic crisis in oil-rich countries where oil is the mainstay of the economy. Oil-rich countries have traditionally used cash from oil exports to either stockpile wealth or balance their fiscal budgets. Countries that depend on oil to balance their national budgets are is trouble. Venezuela is facing crippling inflation and is close to default because 95% of its exports fund over half of the GDP. Smaller oil producing countries including Libya, Yemen and Bahrain are experiencing serious financial problems. Large countries like Russia are also feeling the pinch. Worldwide only three counties can make a profit when oil is below $100 per barrel. “The only country that is able to balance its budget at today’s oil prices is Norway with a breakeven estimate of about $40 per barrel.”