Return to Blog

Oil crash spreading political strife around the world, State Department rep says

The collapse in oil and natural gas prices is creating an uneasy situation for producing nations that rely on that revenue to function, a U.S. State Department official said Tuesday at a conference in Houston.

“How long can we go in an environment of $45 to $50 oil at 60 percent reduced revenues before that starts causing significant political instability?” said Amos Hochstein, special envoy and coordinator for international energy affairs for the State Department, told an audience gathered for a conference in downtown Houston. “I worry about that quite a bit.”

Without naming specific countries, Hochstein said there are several producing nations, especially those that pump 3 million barrels or less per day, that are struggling with the sharp reduction in revenue from oil and gas sales that fuels their budgets. Compounding the problem, some oil companies who operate in those territories have said they plan to curtail spending and new investments there until oil prices recover, Hochstein said at the Global Energy Summit hosted by law firm DLA Piper.

That’s creating problems for some allies of the United States, including Iraq, which has been financially pinched by the oil slump at a time when it’s scrambling to fend off attacks from a group of extremist militants calling themselves the Islamic State, Hochstein said.

Some countries have already started to respond to the crisis by slashing subsidies to save money, he said. The oil-rich United Arab Emirates deregulated fuel prices in August, pushing pump prices higher for motorists and sowing speculation that other Middle Eastern producers may follow suit.

Read the rest at FuelFix.com

Disclaimer: Although the information contained herein is from sources believed to be reliable, TFS Energy Solutions, LLC and/or any of its members, affiliates, and subsidiaries (collectively “TFS”) makes no warranty or representation that such information is correct and is not responsible for errors, omissions or misstatements of any kind. All information is provided “AS IS” and on an “AS AVAILABLE” basis and TFS disclaims all express and implied warranties related to such information and does not guarantee the accuracy, timeliness, completeness, performance or fitness for a particular purpose of any of the information. The information contained herein, including any pricing, is for informational purposes only, can be changed at any time, should be independently evaluated, and is not a binding offer to provide electricity, natural gas and related services. The parties agree that TFS’s sole function with respect to any transaction is the introduction of the parties and that each party is responsible for evaluating the merits of the transaction and credit worthiness of the other. TFS assumes no responsibility for the performance of any transaction or the financial condition of any party. TFS accepts no liability for any direct, indirect or other consequential loss arising out of any use of the information contained herein or any inaccuracy, error or omission in any of its content. This document is the property of, and is proprietary to, TFS Energy Solutions, LLC and/or any of its members, affiliates, and subsidiaries (collectively “TFS”) and is identified as “Confidential.” Those parties to whom it is distributed shall exercise the same degree of custody and care afforded their own such information. TFS makes no claims concerning the validity of the information provided herein and will not be held liable for any use of this information. The information provided herein may be displayed and printed for your internal use only and may not reproduced, retransmitted, distributed, disseminated, sold, published, broadcast or circulated to anyone without the express written consent of TFS.