Petroleum-exporting countries move to stop drop in oil prices
The petroleum-exporting nations Saudi Arabia, Russia, Qatar and Venezuela agreed to cap their oil production at a meeting in Doha on Tuesday in a bid to halt the drop in oil prices on the global market. Commentators examine the impact of sinking oil prices on the global economy and on geopolitics.
Oil prices turning enemies into business partners
In view of the situation in Syria it is astounding that Saudi Arabia and Russia are in agreement as regards oil prices, comments the liberal-conservative daily Diário de Notícias:
“No one who observed the meeting of oil ministers would think that they represent countries that are backing opposite camps in Syria. ... In Doha the only issue on the agenda was the one on which both countries agree: the urgency of halting the drop in oil prices. ... Meanwhile Moscow is still supporting the advance of the Syrian army on Aleppo, a stronghold of the rebels who want to topple the Syrian dictator Assad, and who have the backing of the Saudi royal family. Empty coffers and war drums are a notoriously bad combination. Perhaps the drop in oil prices will help to constrain the ambitions of the Russians and the Saudis.”
New tax on petrol and diesel - now
The low oil price is neither a godsend nor a gift but a call for the Danish government and others to take action, the centre-left daily Politiken argues:
“The goal must be to achieve complete independence from the governments that want terror and war, and to wait for the right moment to raise the price of oil once again. Only by hitting out at these rulers on the economic level can one hope for a process of democratic change. For that reason Denmark must draw the right consequences from the low oil price. Why not impose a one-krone levy on petrol and diesel? If the price increases again the government can adjust the levy accordingly. The revenues should be used to make public transport cheaper or the economy greener. That would be good for the climate and bad for the dictators.”
A weaker Russia is good news for Latvia
The plunging oil prices have a positive side as regards Russia, the daily Diena comments:
“The oil prices mean economic problems for Russia, which has long been Latvia's third most important export partner. And this could have a negative impact on the Latvian economy too. … At the same time many can see the positive aspects of this trend: financial problems limit Russia's armament options and also its ability to back the activities of separatists in neighbouring countries. … The developments on the oil market have a global impact, and for our country ultimately the positive aspects could outweigh the negative ones that arise from Latvian exporters' loss of Russia as a market.”
World could be laid low by oil monster
The drop in oil prices represents a threat despite its positive impact on economic growth, the liberal daily The Economist warns:
“The latest lurch down is also a source of anxiety. Collapsing revenues could bring political instability to fragile parts of the world, such as Venezuela and the Gulf, and fuel rivalries in the Middle East. Cheap oil has a green lining, as it drags down the global price of natural gas, which crowds out coal, a dirtier fuel. But in the long run, cheap fossil fuels reduce the incentive to act on climate change. … But this oil shock comes as the world economy is still coping with the aftermath of the financial crash. You might think that there could be no better time for a boost. In fact, the world could yet be laid low by an oil monster on the prowl.”
Saudi Arabia could trigger financial crisis
Speculation that Saudi Arabia could unpeg the riyal from the dollar is a source of concern for the daily Jutarnji list:
“Unpegging the riyal from the dollar would immediately lead to its devaluation. The price of oil would drop under ten dollars a barrel and trigger hyperinflation in Saudi Arabia. For global finances that would be tantamount to exploding an H-bomb. The currencies of all other Gulf states that are pegged to the dollar would be devalued, leading to rapid inflation. This would be followed by the devaluation of the rouble, the Canadian dollar, the Australian dollar, the peso, the Algerian dinar, the rupee. ... This disaster scenario has already started with the drop in oil prices. Kazakhstan and Azerbaijan have unpegged their curriences from the dollar, and banks and funds are taking steps to safeguard themselves against a drop in the value of the riyal.”