Following my post about the impact of costlier energy on the US economy, the New York Times today has a piece on the impact of falling energy prices (around $70 today; current pricing here) on the economies of Russia, Venezuela and Iran.
The article says that Venezuela’s 2009 budget is based on an oil price of $60 per barrel; the Russian budget is pegged to $70-a-barrel oil; and it cited the International Monetary Fund assessment that Iran would face unsustainable budget deficits should prices for oil fall to $75.
Given that these countries have been antagonists to the US and its allies highlights the geopolitical significance of oil prices and the appeal of keeping oil prices low by reducing demand and developing energy alternatives. Though of course, low oil prices make alternatives economically less attractive.
