Courtesy Reuters

The most startling surprise in the international economy during the 1980s has been the fulfillment of prophecies made five years ago—often voiced, seldom believed—that oil prices would decline significantly from their peak price of over $40 a barrel in 1980-81. Prices have, in fact, fallen to less than $12 a barrel on the spot market this past winter.

There is almost universal agreement that, on the whole, lower oil prices are beneficial to the world economy. But very low prices will pose very big problems. A further dramatic decline in oil prices will have a revolutionary impact on world politics

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