As Oil Prices Plunge, OPEC Output Is at Risk From Social Unrest - Bloomberg

As Oil Prices Plunge, OPEC Output Is at Risk From Social Unrest - Bloomberg:

Oil’s plunge has taken prices below the level all but one OPEC country needs to square their 2019 budgets, increasing the risk of supply disruptions from economic dislocation and social unrest. 


At today’s Brent price of $55 a barrel, only uber-wealthy and sparsely populated Kuwait will be able to make ends meets next year. OPEC giants Saudi Arabia, Iraq and Iran need much higher prices. So do the nations that have suffered disruptions in the past when prices have fallen: Libya, Venezuela and Nigeria.

As prices have dropped, the market has focused on the impact on U.S. shale growth next year, but recent history points to rising risks within the cartel. As oil revenues fall, governments could soon face social unrest due to slower economic growth and higher unemployment. They’ll also have far less money to invest in the petroleum sector to keep output up.