3 Oil-Rich Countries Face a Reckoning

By Reid Hulett

http://www.nytimes.com/2008/10/21/world/21petro.html?_r=1&ref=world&oref=slogin

Venezuela, Iran, and Russia all have economies very much based on there oil producing capabilities. That is the main source of revenue in these countries, and they were prospering recently due to the ridiculously high gas prices, which at one point were as high as $147 a barrel. However, because oil prices are dropping so much, ($74.25 a barrel as of Monday night), there economies are also taking a little bit of a hit.

If there is a worldwide recession, which a lot of experts are saying is possible, it could make this situation worse for these three countries. A worldwide recession would cause a decrease in the demand for the oil and keep the prices low. To make the matters worse for them, due to the fact that oil prices have been so high and they have been making so much money, they have largely increased their spending. And if oil prices don't go back up, they could go into deficit spending or cause them to choose priorties on which to spend money.

Although Venezuela, Iran, and Russia face no immediate economic crisis, there is still some worry among them. If oil prices continue to drop, or even just stay at the current price, these countries could be facing an economic crisis.