Global Economic Crisis

With average oil prices on the global market falling under 40 dollars per barrel, it is clear that the depression in petroleum commodities is not only sustained, but likely to endure into 2016. This is based on projections that oil supply will grow faster than consumer demand. The emergence of post-Iran sanction oil on the market in the coming year assures the oversupply of petroleum.

The collapse in oil prices  is both an indicator of a weak global economy, and the cause of further economic erosion. The economic and fiscal harm the contraction in oil prices has created has also had major political implications in economies highly dependent on the export of carbon-based commodities. The defeat of the conservative government in Canada in the recent national election is directly attributable to a weak Canadian economy,  largely caused by the fall in the value of oil exports from the province of Alberta. Venezuela is another case of political fallout caused by the crash in the global oil market. The socialist regime of President Maduro lost control over the nation’s legislature in the recent elections, again the primary cause due to economic damage resulting from the collapse in oil export earnings.

The projection of continuing weakness in the global oil market will undoubtedly create further political instability in economies highly dependent on oil exports.

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