The collapse of oil prices has raised major security issues in countries largely dependent to a on the export of this commodity. With oil prices down from over USD 100 a barrel one year ago to this week’s level of USD 42, the future is looking bleak. In Iraq, Russia, Nigeria, Venezuela and Ecuador, cheap oil has led to recession, coupled with an increased risk of civil unrest and political instability.
The benefits of lower fuel costs for consumers tend to pale into insignificance compared with the dire prospect of markets being flooded by surplus production.
Indeed, the fall in oil prices is a reflection of overall economic instability that could affect all markets and not only those dependent on oil exports.
Notwithstanding the resulting growth prospects for industrialised EU countries that import large amounts of oil, what action can the Commission take to forestall the economic destabilisation that might result from the above situation?