Authoritarian petro-states were riding high earlier this year, enjoying record receipts from oil revenues which provided the basis for securing domestic political support through rising living standards, as in Russia, or subsidies and patronage, as in Iran and Venezuela. The surplus also provided resources for growing soft power initiatives and for funding international allies and proxies.
But the downturn in oil prices, which could yet plummet further in the face of the global economic and financial crisis, has chastened at least some members of the axis of diesel, as this report suggests:
Venezuela’s Chavez, who blustered and spread the wealth, has become more contrite as oil income shrinks; Iran spent a lot on crowd pleasing measures that did not manage to throw off the dead weight of sanctions. For now, only Russia seems able to have it both ways, pushing against the U.S. when oil was expensive, and now that it is cheap, cutting a deal with China that could change the game for everyone.