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With the Dow dropping another 700 points and fears of recession setting in, the price of crude oil dropped to US$71 a barrel on Wednesday, its lowest point in more than 13 months.
This is a huge shift from July, when oil prices were more than double what they are now — US$147 a barrel. Back then, prominent leaders like Venezuelan President Hugo Chavez, Russian Prime Minister Vladimir Putin and Iranian President Mahmoud Ahmadinejad were swimming in petrodollars and grinning from ear to ear, planning their geopolitical agendas.
Chavez’s utmost priority is to secure his hold over the country, especially since more and more Venezuelans are growing disillusioned with his Bolivarian vision as inflation keeps climbing and food becomes scarcer. His way of holding onto power is to keep throwing money at his population, as well as his regional allies, through oil-funded social welfare programs and to buy plenty of arms from the Russians for the Chavistas protecting him and his support base. The Venezuelans announced today that they are betting on $60 per barrel oil for their 2009 budget. But with oil prices dropping this fast, Chavez is going to be in for a rude surprise.
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