Oil Prices Meltdown Heralds New Wave Of Destabilization?

Oil Prices Meltdown Heralds New Wave Of Destabilization by Dan Steinbock

As the recent summit of the Organization of the Petroleum Exporting Countries (OPEC) suggests, the ceiling of oil production will not be lowered, despite great overcapacity. What we are witnessing is not just a cyclical shift, but a new secular tend that heralds the demise of the petrodollar era in the Middle East.

Meltdown of oil prices

After the 1945 Yalta Conference, which effectively divided Europe, President Roosevelt’s subsequent meeting with Saudi King Abdel Aziz Ibn Saud led to a secret agreement, which required Washington to provide Saudi Arabia military security in exchange for secure access to supplies of oil.

That partnership was shaken in October 1973 by the OPEC’s oil embargo following...