“We’re all in this together,” said Ali al-Naimi, Saudi Arabia’s veteran oil minister, at an oil conference in Houston last week. The oil market “could drown in oversupply,” as the International Energy Agency (IEA) warned in January, and global prices are at their lowest level since 2003, so all petrostates are bleeding. Venezuela is on the brink of bankruptcy; Russia’s economy is expected to shrink for the second year in a row; and Nigeria and Azerbaijan are seeking emergency loans from the World Bank and the International Monetary Fund. The economic hardship experienced by its members makes one wonder why [...]
Editor’s note: This article is part of an ongoing WPR series on the impact of falling oil and commodities prices on resource-exporting countries. Last month, Malaysia cut its 2016 growth forecast and slashed spending plans as the economy continues to suffer from falling oil prices. In an email interview, Joshua Kurlantzick, senior fellow for Southeast Asia at the Council on Foreign Relations, discussed Malaysia’s economy and the impact of the commodities slump. WPR: How important are oil and commodities for Malaysia’s economy, and what impact have falling oil and commodities prices had on domestic politics? Joshua Kurlantzick: Oil and commodities [...]
For the first time, Saudi Arabia’s budget this year includes measures to gradually reduce subsidies on gasoline and other fuel, in response to declining oil revenue from the slump in global energy prices. The move, replicated in other Arab Gulf states, represents a fundamental challenge to the assumptions on which the region’s economy and political structure are based. Since the beginning of the year, millions of Saudis have found it more expensive to drive to and from work each day. To people living outside the Gulf, the burden may not seem onerous. The cost at the pumps of higher-grade gasoline [...]
