TW: There are always silver linings in any story. One of those with the current financial crisis is the challenges those petro-dollar driven states are facing as a result of the steep decline in oil prices. Russia, Venezuela and Iran, all very different situations but all of whom have become highly aggressive internationally largely as a result of the economic power provided by high oil prices, are seeing their ability to throw their weight erode rapidly diminishing.
From the Economist:
"Of late another trio, bound together by dislike for America, and confidence based on surging energy revenues, has appeared: an “axis of diesel”, as some have named it, comprising Russia, Iran and Venezuela...The “diesel” trio did gloat at first over the West’s meltdown. But they overlooked one of its effects: a plunge in oil prices, and hence their own revenues...
For each $10 drop in the oil price, the [Venezuela] gets $5 billion (1.4% of GDP) less in revenue...
In sum, Iran, Russia and Venezuela are all likely to be left short of cash—and facing a diminution in their international clout. “Never confuse brilliance with a bull market,” goes a Wall Street saying. The leaders of the oily trio may have thought high oil prices were an adequate substitute for good governance. In many quarters, the difference is now painfully clear."
http://www.economist.com/world/international/displaystory.cfm?story_id=12480942
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