Sudden slump in price of crude now at its lowest for four years sends tremors through capitals of the worlds great oil powers. A look at the economic and geopolitical implications of $80 oil
The sudden slump in oil prices, which have fallen 15% in the past three months, has sent tremors through the capitals of the worlds great oil powers, many of whom could face testing budget crunches if the tendency persists.
Higher output coupled with weaker demand from China and Europe has driven the price of crude down to $85 its lowest for four years. The US also now produces 65% more oil than it did five years ago following the boom in shale production. The rise has contributed to the global glut of crude and allowed the US to import 3.1 million fewer barrels of oil a day compared with its peak in 2005. Prices are now well below the level on which many oil exporters have based their budgets.