All those oil export countries are suffering from a destroyed oil price. The Saudis may go public, OPEC’s in disarray, the U.S. is suddenly a global exporter, and shale drillers are seeking lifelines from investors as banks abandon them. Since Iran join this big business after several years of sanction, the oversupply of oil came to a 5 year high. For countries that heavily rely on the revenue from exporting oil, this worse situation just speed up the coming crisis.
Russia has a relatively diversified economy, but it’s still running the biggest deficit in five years, and selling assets to finance a stimulus program. Nigeria, which depends on oil for almost all of its exports, is battling to stave off a currency devaluation and pleading for development loans to replace the missing petrodollars. Venezuela is even worse off, with debt defaults looming and an inflation rate estimated by the International Monetary Fund at 275 percent.
While the Saudis have deeper pockets than most of their OPEC peers, they haven’t been immune from the price turmoil -- especially with wars in Yemen and Syria to finance. Reserves tumbled by about $115 billion last year. Saudi rulers have slashed subsidies, announced new taxes and said they’re even considering selling shares in the state oil giant, Saudi Aramco.
It’s unlikely for the entire oil export countries to come to an agreement in which everyone hold a limit production. It’s a game that so many parties are standing for their own interests. Under a global recession prospect, the demand of oil will not explore and also China who plays a big role of demand in this business faces the most serious economic problem than before. In the short term, the oil price is not likely going to get a rebound but stay between $20 and $30. Those who die firstly in this game will contribute more space for the rest to carve out the pie and survive. It’s more like a game of win or die.