Free Preview of Members-Only Content
To view the requested intelligence, you must be a Stratfor.com member.
Oil passed $120 per barrel today, which depending on how you measure it, means that it is about 20 percent higher than the highs reached in the late 1970s and early 1980s. In other words, this is getting serious. It is not the intensifying discussion of gasoline prices that we hear, but rather the impact that the price of oil is beginning to have on the global system. If oil prices continue at this level or rise, there will be long-term shifts in how the international system works.
One of these shifts is already obvious. The nations of the Arabian Peninsula have accumulated a tremendous amount of cash. Most other oil producers use surplus money from energy sales largely for internal purposes. Nigeria and Venezuela, for example, are not about to become international investors. The situation in Arabia is different. Those economies can’t possibly absorb the money that is pouring in. Therefore the money — petrodollars, as we used to call them when we were young — is available for investment around the world. Much of that is coming into the United States in various flows, helping to stabilize equity markets, for example. But as in the 1970s, economic power translates into political influence — and the Arabian influence on a wide range of countries and issues will increase dramatically. The countries of the Arabian Peninsula will once again become the primary source of large-scale finance.
| Stratfor Members, please log in at the top left hand corner |
