Decline in the crude oil prices is just after the green signals from US government to export crude oil outside country. The OPEC members don’t agree to decrease the production of crude oil and there are possibilities of entering oil from Iran in global oil market. This everything results in sharply fallen of prices of crude. Few developing countries are finding opportunities in this but for few countries it is definitely problematic and to overcome on this, will be the great challenge in front of them.
Russia is one of largest oil producer has to face this problem as its economy is based on that; can blame easily to US but this is not the solution. The oil producing countries are in such turn now that they cannot even cut the production rate because in that case they will lose the market. After problem with Turkey, it is expected that Turkey will get difficulties in getting oil and gas from Russia and it is but declining prices of oil is opportunity of Turkey. With this, the impact of global warming the winter in Turkey is now not as cold as it was in previous decades. The need of oil and gas is also decreasing day by day. Russia can take a step further to save economy to sale the weapons to many countries in cheap rates and this can create more problems.
China-Russia Oil and Gas Deal was the best gift for Russia but current oil prices makes question in front of that. With this, China is going through economic crises in these days, will try to take benefits of these fall prices as it is largest importer of the crude oil.
The fast growing countries such as Brazil will think on production of biofuel which already responsible for many social and environmental crises such as the food vs fuel issue. At Brazil, currently more than 50 % vehicles use the 24 % ethanol blended petrol and rest use total ethanol as fuel. This ethanol is derived from corn or sugar crops in agricultural land. The low prices in crude oil will make Brazil to think on converting the biomass producing land to agricultural land again and which will be better for that country and for whole world in long term prospective.
India is focusing on nuclear energy though people are opposing that due to safety reasons. After going through economic crises in past, India knows the importance of foreign currency; it has opportunity to save foreign exchange as it is dependent on oil producing countries for its approximately 80% of crude oil. There are no chances of any extension or cancellation of nuclear energy projects but decreasing oil prices will definitely encourage to Indian people to oppose the nuclear power plants. This time current government won election on the issue of economic development but in next election the main issue will be safe energy sources.
After Russia the main adverse impact of declining oil prices will be faced by Arabian countries and this will be problematic for the whole region due to possible migration. There is possible increase in migration rate towards Europe will be seen if these crude prices remain declining in same speed. The unemployment was the main reason behind the Arab spring which is stopped now and captured by fundamentalist group in few countries. This thing already destroyed economy of few countries and people are migrating neighboring countries. Now Jordan has almost 50 % of migrants and day by day this number is increasing due to Syrian refuses. Turkey also has big population of Syrian refuses and though European Union countries want to stop refuses at Turkey, it has a limit. In declining oil rate this limit will be crossed and other Arabic people also start migrating though not due to fundamentalism and terrorism but as economic migrants and no doubt there is possibility of increase in crime and terrorism in future in this area.
By Kapilkumar Nivrutti Ingle