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Consequences of the Global Oil Bust
(Washington Post) Fareed Zakaria - We are witnessing a historic fall in the price of oil, down more than 50% in less than a year. Supply is up substantially because a decade of high oil prices encouraged producers throughout the world to invest vast amounts of money in finding new sources. Russia's economy is projected to shrink by 3.4% this year. Oil and gas revenue make up half the government's income. Iraq, where oil makes up 90% of government revenue, faces a massive drop in available funds. The International Monetary Fund estimates that Iran needs prices to be almost $100 a barrel to balance its budget. In the medium term, it will face pressures just like the others.