This article is far too triumphalist for my taste, but it's nevertheless true that Russia, Iran, and Venezuela are going to run into significant economic difficulties because of the drop in oil prices. Venezuela has already begun budget austerity measures. While all three countries benefited enormously from the combination of general global economic growth and tremendous growth in oil prices, they're going to doubly suffer from the collapse of both. Venezuela and Russia are both in the middle of significant military expansions (with Venezuela buying primarily from Russia), which will probably have to be put on hold.
At the Patterson School conference last year, one of the speakers noted that Russian economic planning was designed around the expectation of $40/barrel oil. I have my doubts that the Russians have been able to stick to that, although they have accumulated substantial foreign cash reserves. In Iran and Venezuela, the extra cash has been used to shore up regime popularity and its absence may eventually result in domestic political strife.
--Robert Farley
