Geopolitical fallout from weak oil prices

Washington

MUCH of the discussion about the dramatic changes taking place in the international oil markets that have brought about a more than 40 per cent fall in Brent crude since June, has been focused on the way that these developments could transform global economics.

Hence, while the collapse of oil prices is expected to deliver a financial blow to the mighty oil cartel that is Opec and slow economic growth in oil-producing nations such as Iran, Russia and Venezuela, it should help energise the economies of oil-importing countries like Japan and India. For example, the cut in petrol prices provides the average American consumer with what amounts to an extra pay rise while putting downward pressure on the US inflation rate and accelerating the American economic recovery.