More reasons not to short oil vol (do we need any more?), from Fareed Zakaria of the Washington Post:
Iraq: “The New York Times’s Tim Arango painted a picture of a country “in the midst of an expensive war against the Islamic State that is now facing economic calamity brought on by the collapse in the price of oil, which accounts for more than 90 percent of the Iraqi government’s revenue.” He noted that almost 8 million Iraqis depend on government salaries, which cost nearly $4 billion a month. Total oil revenue is now less than $3 billion a month. A senior Iraq politician told me that Iraq might not survive as a nation if oil prices stay low for long. ”
Venezuela: “The economy shrank 10 percent last year. It is expected to shrink an additional 8 percent this year, and inflation will run at a Weimar Republic-like 720 percent, according to the International Monetary Fund. As The Post’s Matt O’Brien wrote, “The only question now is whether Venezuela’s government or economy will completely collapse first.””
Nigeria: “When asked recently what keeps her up at night, IMF chief Christine Lagarde cited petro-states such as Nigeria, where 90 percent of exports and 60 percent of government revenue come from oil sales. Surging on the back of this crisis is Boko Haram, which surpassed the Islamic State as the world’s deadliest terrorist group in 2014, killing 6,644 people that year.”
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