Spotting the inviolate in oil price volatility

Originally printed in The Christian Science Monitor, December 1, 2014.

With world oil prices at their lowest in four years, another Great Sorting has begun. Which nations, businesses, or people will benefit? Which will suffer?

The better question to ask, however, may be this: Is the world better off when oil prices fluctuate with high uncertainty?

For oil giants like Saudi Arabia, which want to keep their share of the market, creating price volatility has been a frequent strategic move. It scares off investments in costlier alternatives to the cheap crude of the Middle East. Last week, for example, the Saudis forced the Organization of Petroleum Exporting Countries to let prices keep falling rather than put a floor under them by reducing OPEC production. The cartel’s move may be designed to curb spending on drilling for oil and gas in shale deposits, which has upended assumptions about the future of oil.

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