Will Low Oil Prices Cause Economic Chaos in Middle Eastern Economies?

There is a bit of economic worry brewing in the lands of those that export oil. Will continued low oil prices cause economic chaos in the Middle East? Well, as one recent oil industry international analyst put it;

Yes, I expect that these low oil prices will;

A.) Cause the collapse of Dubai. Why? Financed by Swiss Banks and many international banks including Citigroup. The oil money used to pay the interest on that debt and future oil profits as collateral. Those construction loans will also stop, so too will the growth, it will implode. Some say with real estate prices down nearly 45% it's too late.

B.) Will have smaller OPEC Nation like Nigeria are in deep trouble – large ones too. You might see an overthrow of Saudi Arabia. In fact, you could see the entire Middle East erupt in revolution.

Indeed, it is believed that Venezuela's Hugo Chavez's plans will fall short as well. Even as OPEC curtails it's output, the rules of supply side manipulation are not working. You see, the demand is not there and no one seems to be buying at any price. On the world oil market stage even China has cut back considerably.

Will exporting nations be able to continue to survive without their oil exports above $ 45-50 per barrel? Most industry gurus think now, which does not look good for these nation's overall economic health, or bode well for their ability to borrow money. Without the oil income many of these nations will implode or experience large amounts of civil unrest in the near future. We will all be history's observers.

Source by Lance Winslow

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