Oil and Dictators

At first glance, the answer would seem obvious. Venezuela, Nigeria, and Iran need crude prices as high as $110 per barrel to fund their states in their present condition. Russia, half of whose government budget depends on black gold, is not far behind. Saudi Arabia, which did much to reverse the “Arab Spring”, announced in recent years new oil-funded projects costing about $500 billion and aimed at pre-empting adversaries who could use the discontent with the regime in Riyadh to agitate the mind of the masses.

But things are more complicated than they seem.

In Russia, where Vladimir Putin enjoys a favorable rating of 80 percent, the popular imagination associates the new Cold War between Moscow and the United States with the current crisis. (The severity of the crisis is apparent in two statistics: the ruble has lost 50 percent of its value in 2014, and GDP is expected to decline 4 percent to 5 percent in 2015.) The government propaganda machine is already busy selling the idea (through “independent” sources) that the energy giant Rosneft, one of the most indebted companies in the world, might have trouble meeting payments of more than $7 billion this month because Western sanctions are preventing it from getting access to foreign capital markets. Putin has given his friend Igor Sechin, the head of Rosneft and a symbol of mercantilist cronyism, a helping hand through the central bank and various private banks under his influence, and he hopes to reinforce the defensive psychology of a society that is deeply distrustful of the West.

Source Article from http://www.freedomsphoenix.com/News/168501-2014-12-22-oil-and-dictators.htm?EdNo=001&From=RSS

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Oil and Dictators