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Page added on March 8, 2015
Oil Producers Could See “Regime Change”
As we’ve noted previously, the US-Saudi joint effort to force the Kremlin into cutting Assad loose (the end goal of course being to install a government that will acquiesce to mainlining Qatari natural gas through Syria straight into Europe thus breaking Gazprom’s stranglehold), has resulted in a bit of collateral damage for the world’s less geopolitically important oil producing countries (take Venezuela for instance, where collapsing crude prices have exacerbated an already abysmal scenario, leading to, among other tragic outcomes, a shortage of soap and condoms).
Bloomberg suggests that the destabilization of already fragile political and economic situations could lead, in short order, to “regime change” across oil producers:
The large petrostates are varying degrees away from the Weberian ideal of the rule of law. That could spell trouble. Low oil prices threaten the ability of these inefficient, sometimes corrupt states to service their debts and may curtail the government spending that keeps the masses content. This may in turn ignite demands for a fairer distribution of these dwindling oil proceeds and, possibly, regime change.
From Bloomberg, utilizing Worldwide Governance Indicators’ measures of corruption and rule of law:
…and an update on oil producers’ currencies since peak oil…
… and default risks…
5 Comments on "Oil Producers Could See “Regime Change”"
Northwest Resident on Sun, 8th Mar 2015 1:39 pm
More like, Oil Producers WILL See Regime Change. Not if, but when. Just a matter of time, and probably not much time either given the fact that BAU is in the process disintegrating already.
BobInget on Sun, 8th Mar 2015 1:49 pm
Venezuela has already shifted alliance from the US to China. Once Venezuela sells three
US refineries, downstream snack bars, ( ) exports to the US will slow to a trickle.
The US is Not currently importing oil from Nigeria or unmentioned Libya or Yemen.
Saudi Arabia (and UAE) have increased (oil) exports to the US in order to weaken competition, bankrupt Venezuela and Iran,
making the US all the more dependent.
The US is primed to protect Saudi Arabia militarily. BTW, KSA has moved to top spot, edging out India, as the world’s biggest
arms buyer.
Oh what a tangled web.
Iran, for obscure religious (to non Muslims) reasons Saudi Arabia’s principal enemy.
As it happens Iran, not nuclear Pakistan, is also
Israel’s biggest foe. By Mideast logic,
“the enemy of my enemy is my friend”.
Not so fast. Iran is currently battling Sunni IS.
While KSA spawned IS they now fear them more then their new best buds, the Israelis.
It’s an unholy mess.
synapsid on Sun, 8th Mar 2015 5:00 pm
BobInget,
Last I heard, Venezuela had taken the CITGO refineries off the market. Has that changed?
rockman on Mon, 9th Mar 2015 6:26 am
Syn – Ask and ye shall receive:
A sale process for Venezuela’s Citgo Petroleum Corp. has been called off, and the U.S.-based oil refiner instead plans a debt sale that would raise funds for the cash-strapped country.
The auction was scrapped in recent days after several suitors submitted bids in early December, people familiar with the matter said. Citgo is now planning to raise $2.5 billion in debt instead, one of the people said.
The sales process could be restarted later. Corporate auctions are rare in the immediate aftermath of such recapitalization deals, however, and the added debt could make the company less attractive to suitors too.
synapsid on Mon, 9th Mar 2015 5:20 pm
Why thank you, rockman.
You will get your reward in Heaven; I shall see to it.