Oil exports, that is.
OPEC yesterday announced a cut in oil production, clearly aiming to increase prices.
Both candidates in the US elections want to reduce America's reliance on foreign oil. A thought that I had is what impact that has on the oil-exporting countries themselves.
According to the US Department of Energy, Saudi Arabia (one of those countries whose people at any rate don't like America very much- the government's purchase of US weaponry says different about them) relies on oil exports for about 40% of its Gross Domestic Product.
If the United States was to cut its oil use significantly over the next few years- and be joined by other countries around the world, Saudi and countries like it would suffer a considerable loss of government income.
This would lead to a decline in Saudi living standards- and an increase in terrorist support as people are unhappy with their government's social provision.
No country should depend on a commodity with a wildly fluctuating price as its main source of income.
Saudi Arabia and the Middle Eastern countries need to diversify their economies quickly- something we should be prepared to do.
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