Don’t Count Out the Petrostates

From the Asia Times Online:

Without question, the landscape of diplomatic battles has been impacted deeply by the rise of petro-states in the context of ballooning oil prices. The question now arises whether this is just another bubble that will be pricked by the sharp recent fall in petroleum prices. Already, Western media outlets are gloating that the heydays of Russia, Iran and Venezuela are over as oil prices have plummet in response to decreased world demand. There are doomsday predictions that the healthy foreign exchange reserves built up by the petro-states are dwindling and that the next logical step would be a reversal of their policies of confrontation with the US. (…) However, announcing the “fall” of Russia, Iran and Venezuela as a result of the about-turn in oil prices would be naive. A state’s power in world politics is not absolute, but relative to the power of other states. If petro-states are on the back foot on account of the plunging value of their chief export, then the oil-importing nations of the West are stuck in an even deeper hole. The relative political power of the US and other Western states has taken a massive dip as a result of unregulated financial fiction, and petro-states cannot fall when their rivals are getting battered.