Plummeting price of oil is still the biggest energy story in the world.

It's bringing back cheap gasoline to the United States while wreaking havoc on oil-producing countries like
Russia and Venezuela.
June 2014 - price of Brent crude - around $115 per barrel
January 23, 2015 - price of Brent crude - $49 per barrel
The oil price crash is now upending the global economy, with ramifications for every country in the world.
Low prices are excellent news for oil consumers in places like Japan or the US, where gasoline is the cheapest
it's been in years.
But it's a different story for nations reliant on oil sales.
Russia's economy is facing a potential meltdown.
Venezuela is facing unrest and may default on its debt.

> While in the US and Canada

As oil prices increased, many energy companies found it profitable to begin extracting oil from difficult-to-drill
places.
United States - using techniques like fracking and horizontal drilling to extract oil from shale formations in
North Dakota and Texas
Canada by heating Alberta's gooey oil sands with steam to extract usable crude
This led to a boom in "unconventional" oil production. The US alone has added 4 million extra barrels of crude
oil per day to the global market since 2008. (Global crude production is about 75 million barrels per day, so this
is significant.)
Up until very recently, however, that US oil boom had surprisingly little effect on global prices. That's because,
at the exact same time, geopolitical conflicts were flaring up in key oil regions.
Civil war in Libya.
Iraq was facing threats from ISIS.
The US and EU slapped oil sanctions on Iran and pinched its oil exports. Those conflicts took more than 3
million barrels per day off the market
Even more significantly, oil demand in Asia and Europe suddenly began weakening thanks to slowdowns in
China and Germany
At the same time, countries like Indonesia and Iran have been cutting back on subsidies for fuel users
> OPEC Meeting (Secretary-General Abdalla El-Badri)
At its big meeting in Vienna on November 27, there was a lot of heated debate among OPEC members about how
best to respond to the drop in oil prices. Some countries, like Venezuela and Iran, wanted the cartel (mainly Saudi
Arabia) to cut back on production in order to prop up the price. These countries need high prices in order to "break
even" on their budgets and pay for all the government spending they've racked up
On the other side of the debate was Saudi Arabia, the world's second-largest crude oil producer, which was
opposed to cutting production and seemed willing to let prices keep dropping.
In 1980s when prices fell and Saudi tried to cut back the production, it lost huge market share
Saudi's forex reserve is $750 billion, which can help in meeting with short-term deficits

> How falling oil prices could affect Russia and the US
The plunge in oil prices is having significant economic consequences around the world. A few examples:
Russia: Russia's situation is getting the most attention these days. The country's is hugely dependent on oil and
gas production with oil revenues making up 45 percent of the government budget and the sharp fall on prices
has been ruinous.
RUSSIA'S ECONOMY IS EXPECTED TO SHRINK 4.5% NEXT YEAR IF OIL STAYS AT $60 PER BARREL
So far, Russia's central bank has been struggling to deal with this crisis. On December 15, 2014, the country
suddenly hiked interest rates from 10.5 percent to 17 percent in an attempt to stop people from selling off rubles.
But those rate hikes are likely to slow the country's economy down even further.
Venezuela: There's growing concern that the oil crash could cause Venezuela, another major oil producer, to
default. The nation's economy heavily dependent on oil revenue is set to shrink some 3 percent this year and
inflation is rampant.
The United States: In the US, meanwhile, a fall in crude prices will have both positive and negative impacts. For
many people, it will offer an excellent economic boost: cheaper oil means lower gasoline prices which have
fallen to $2.04 per gallon, the lowest since 2009
But it's not all good news. Oil-producing states like Texas and North Dakota are likely to see a drop in revenues
and economic activity. The falling price of oil is also putting severe pressure on Alaska's state budget.