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WVU POLS 103 - more focus on global oil issue

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POLS 103 1st Edition Lecture 29Outline of Last Lecture I. Terrorism in CanadaII. Pakistan’s MilitantsIII. NigeriaIV. Cheaper OilOutline of Current Lecture II. Cheaper Oil conta. USi. China1. Europea. IndiaOther countriesCurrent LectureGlobal OilPrice of oil has fallen dramatically has nothing to do with supplythis is a demand side reductionEurope combined is the biggest consumer of oil followed by US and Chinatrend that rich states consume oil and poor states tend not to consume muchimporting oil is political as wellimporters are benefiting from the decrease in price, those that export are not benefiting US is unique in the way that it both consumes and produces oildeclining prices generally good for economyhowever some US oil is harder to produce and lower prices may price some producers out of the market. But overall it is a benefit for the USThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.ChinaThe falling oil prices are unambiguously good for China can reduce subsidies makes the economy better over time EuropeA much more complicated casehuge importerthe falling oil adds to Europe’s deflation problemmakes debt crisis worsepolitical in a sense that Europe gets oil from Russia. They are mat at Russia and want ti find alternative sources. But the lower the price of oil, the less economically competitive alternative energy is IndiaWins across the board all the agriculturally dominated states are winning from this reduces inflationreduces energy costs14% of the government budget was spent on subsidizing oilnow government can spend a lot less to keep gas prices downSaudi Arabiagoing to have a huge loss in revenue from lower oil pricesbut they have a lot of money in the bank so they can survive for a while Venezuela The government owns the oil industryfall in prices means government budget is shotneeds to cut spending, but this creates huge political problemsmight default, huge economic crash on the horizonIranMore problems than Venezuelagovernment budget was planned on previous oil pricesHuge chunk of GDP is used for subsidies under sanctions for Nuke program- can’t borrow moneyso default is catastrophicRussiaDepends on oil- it is a line in their budgethuge hole in their budgetRussia is a regional power as opposed to Venezuela, Iran etc. So they are considered more important when it comes to this. Russia like Saudi Arabia has money in the bank, so they will be able to survive with declining oil pricesThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a


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