ilion more jobs since 2008. u.s. oil production has jumped 80%, much of this do to the sale. if we go below $80 a barrel, we will likely see a sharp slowdown of the shale business which the pens on high investments to drill more and more wells which have a high decline rate. finally the opportunities since the u.s. and other consumers are increasing producers and vice

versa. and the dollar per barrel range, with what is in the past. and the gas price, suggested in the past, revenues going into security trust, mike rounds upgrade our power transmission systems in the u.s.. opec meets later this month particularly with the saudis, who have the capacity of but huge financial reserve. this is an opportunity to discuss the price band which they had actually proposed in the past. the other general point i would make is that timing is critical. we need to move quickly to exert the levera high production

and low prices. iran is a case in point, it is a harder nut to crack. and as we did know, we should not assume low oil prices are here to stay. ur current stronger positionge for our economy and foreign policy and that of our partners. >> we will hear from raymond gilpin next who will talk about the implications for africa. >> thank you very much and it is a pleasure to be here. africa as 15 not countries. i am going to choose one. nigeria is the world's tenth most important oil-producing value terms, and nigeria is a resource rich country.

you look at nigeria per-capita. and research driven because oil revenues and the oil investment, the non-oil economy. what has been happening lately in terms of falling oil prices. and ramifications, but i will talk briefly about the shoes. the first would be tweeting investment and physical challenges and other challenges linked to stability in the region. and nigeria has stopped reserves, pumped out 2 million barrels of oil a day, it has been awhile since investing in infrastructure. new exploration has lagged significantly because of the cost. with decrease in oil prices your

going to see a reluctance of investment to flow into nigeria to do the much needed upgrades in the infrastructure. a lot of world's a particularly on land. in terms of trade we are seeing in 200846% of all nigerian exports came here to the united states and now all it is tending toward single digits. what that means is there has to be significant diversion from the nigerian side which in many cases would be more costly for nigeria as margins are slimmer with declining oil prices beginning to hurt. fiscally what is going to be the implication, and here is where

you see the usual narrative, moral poverty, etc. for domestic budgeting in nigeria it is a little complicated because nigeria has 78 currently and so the direct impact if it stays where it is is going to be in the medium term. what is going to hurt, the sovereign will funds, excess crude account and national reserves. over the last few years nigeria has done an impressive job of keeping its international reserves at about six months of import equivalence. if this continues they we drawn down significantly. sovran will fund that used to be at about 9 billion usd,

$3 billion and dropping. and relatively stable environment has been the anchor for a lot of nigeria as recent economic progress including its leapfrogging to africa and the economy on the continent. political economy, roughly between $200,000 and 300,000 barrels of oil a day. and various shades of that. what that means is it is a lucrative business partly because the margins are so why. you start to wonder what is going to happen on the supply chain. from the pumps to exports. will we see violent competition between groups, or among actors.

will we see a consolidation in 2012 in a study of illicit oil extraction -- we have highly organized and politically connected groups that are responsible for the distraction. with this reduction in the political economy and elections for early next year and the fact that if you eyeball violence in oil producing regions over time, and political events like elections you have spikes that correlate. we will see greater instability if people start competing for decreasing share of the pie.

it all depends on how the local political economy reconfigures. one more thing about the political economy question is one of nigeria has made some improvement at the federal level, the state and local government level, you still have a lot more growing corruption in state and local level because the oversight mechanisms are in place and politicization is becoming even more at the federal level. as nigeria move toward what everyone knows is a very challenging election cycle, are we going to see interstate conflict and violence.

some 170 million nigerians on the planet give or take a few. instability in nigeria will not only impact the oil market, 2.3 million barrels of oil a day, instability could also cause regional instability which could have international implications after seeing in the northeast. on the investment side, the fiscal side, and the political economy side, is not the usual questions and usual issues. is a more complicated mix. the confluence of this fall in oil prices and the pending elections in 2015 pose a pretty daunting challenge. >> thank you very much. next we will hear from risa grais-targow who will talk about

venezuela. >> the invitation to the today, thanks. as many of you know, the oil prices make or break for of venezuela in particular when we think about countries in latin america and countries globally that are oil producers. 96% of venezuela's exports and critically oil export revenue is the main source of dollars for a country that is highly dependent on imported goods which has become even more important over the last several years that activity has declined. policy distortions like foreign-exchange control have contributed to mounting scarcity which has had a significant political ramification. president madoro who assumed

office in spring of 2013 has seen his popularity fall from 55% in april of 2013 to 30% in september. respondents list scarcity resulting from lower levels of imports as their top concern with inflation and security challenges. and some of you know, he came to office in a a pretty weak position having been named hugo chavez's successor but inherited an economy that was in desperate need of an adjustment following chavez's spending spree in 2012. madoro's own weakness prevented him from undertaking any meaningful reform for fear of incurring any additional political costs. we haven't seen the fiscal adjustments that need to take place before the exchange adjustments that need to take place this year. and these problematic policies

like price and foreign-exchange control. this includes oil sector policy where state-owned oil companies continue to be the government's main financing arm for its social programs that have been unable to meet its investment commitments. the higher oil prices have offset the production declines and eliminated the government's urgency in addressing some of the issues in the oil sector. oil production has declined steadily over the last decade from 3.5 million barrels a day in the late 1990s to 2.5 million barrels a day currently. we have seen a stabilization of production but again at much lower levels than in the past. critically the government is falling short of production goals for the future particularly in the heavy oil belt. the government is in an infection point.

the economy is rapidly deteriorating by 3% to 4%. inflation is in the low 60s and only going to rise. increasing good scarcity is obviously eating into the government's levels of support and now the oil prices are adding more political uncertainty. some of the protests against the government that are arresting earlier this year have been limited to the opposition and so far we haven't seen the chavez debate in the street protesting difficult economic situation. with the military fully vested in this regime of survival we haven't seen any material frets to madoro's ability to maintain power. the oil price here is critical, but the government does have

much lower levels of export revenue with which to import basic goods, it could accelerate the risk of a political crisis and be the kind of catalyst for debate to finally say enough is enough and take to the streets and demand some sort of political change. we still not there yet. venezuela's basket price is $76 a barrel. i think they can manage with anything between the or 75, the average oil price for the year is around 94. they still have some room to maneuver and i don't see that political crisis as being just around the corner. our review internally is oil prices are going to recover somewhat this year or next year. we could get into an equilibrium where the government is still able to limp along with oil

prices around 80 as i mentioned. however, if we are wrong about our assumptions and we do see a precipitous, and sustained decline in oil prices, i think that only accelerates the rest of that political crisis i was talking about and also threatens the government's ability to service the debt and commercial debt service. and the potential catalyst for political crisis and regime change in venezuela. >> we will year from will. >> the situation in russia, in venezuela, things are not looking very rosy in the short term. that is for sure. a drop in oil is a loss of revenue. almost 50% of the russian budget comes from oil revenue and that his decrees and that means less

money for a variety of programs put forward by vladimir putin. his increase in the military budget is threatened by the fall in revenue. he will not have as much money to fulfil these various comments in terms of increasing social spending in the 2012 presidential election, and 10 or $15 billion is growing. a lot of revenue is a problem which then leads to increased demand and request on the substantial financial reserves that russia has. russia did enter this crisis with half a trillion dollars in the bank. is the rainy day fund but it is officially raining in russia but money is going out. in deep for the last six months, 13%, 14% of these reserve funds have been spent and demand is only increasing.

with increased pressure of the reserves, there is not as much money to help the currency. the rule has tumbled 20% since the beginning of this year. at various times the russian government has been spending $2 billion to support the ruble. that hasn't worked. to there's a substantial increase in interest rates and we have to wait and see whether that stabilizes the ruble. essentially the lack of revenue, lack of support for the ruble which has a 9 affect and the purchasing power of the average russian citizen, the second major problem with this loss of revenue is the russian budget is already out of whack. the minister of finance proposed a new 2015 through 2016 budget two weeks ago and announced almost immediately that it was obsolete. it was based on the price of $100 a barrel for oil. he has announced he is thinking of a 10% cut across the board.

and in the russian budget, unfortunately the russian media has not prepared anyone for such substantial cuts. the main problem raised by other promises to impact on the actual energy industry in russia and in conjunction with the sanctions, the fall in the price of oil has had a devastating short-term impact on russia's energy producers. the engage in various joint ventures in the arctic. those are off the table because of u.s. sanctions. the oil companies in russia cannot get western financing, that is not possible because of oil sanctions because the western sanctions after the crimea, as a result of the crimea crisis, therefore there's only one place to turn, the russian government, basically asked the russian government for $50 billion which is a huge

amount of money, 10%, significant amount of available reserves and other people lining up as well, a lot of oil companies or banks, banks as well making significant demands on the russian treasury. the drop in the price of oil has begun to impinge on the russian government and its ability to carry out various programs. the last part of want to mention is a broader political and social impact of these developments. obviously vladimir putin has not been swayed for the last six months by economic arguments. he has proceeded to do what you wants to do from a geostrategic standpoint and has not been concerned about the economic consequences. as a result, he has certain advantages going into this crisis. he has high popularity, no real political opposition, and he has

hope that maybe things will change. the price will go back up. this crisis is a little different for vladimir putin as well, as part of his return to power, he has made sure or got out of his way to undermine all the intermediary institutions that could give him coverage in this crisis. the parliament, the prime minister and so forth. as a result if indeed this crisis hits badly for raja there are no intermediary institutions to absorb this crisis and the finger of blame will be pointed all the way up to vladimir putin, directly to vladimir putin. most likely, to double down rather than compromise and that will cause various problems for vladimir putin as well. the patience of the russian people, they are not once did take to the streets, they are patriotic, and they are also

highly reliant on the states for their salaries and pensions. we haven't as yet seen a dramatic political response to this drop in oil revenue. nevertheless, this crisis in many ways is different from other crises, there is no enemy at the gate as in world war ii and no real broader ideological crisis although vladimir putin tried to create one. this is a self-made crisis that has resulted in conjunction with vladimir putin's actions in crimea. when you look at the legislation vladimir putin has been passing, of the most glaring when is the so-called robin hood law which would allow the russian government to compensate oligarchs who have their fellows appropriated. this reflects the mentality going into this crisis and i think they assume they can rely on the patience of the russian

people but that is not necessarily inexhaustible. >> thanks very much. >> talk about the petropower as part of the title of today's session, what saudi arabia appears to be up to as we head towards a meeting of the opec 12 on november 27th when the issue of whether opec will reduce its overall production and put the price back up or not. the main accusation against saudi arabia is it is out to force them to protect themselves against the oil still revolution and maintain its own market share. in the midst of an oil glut. the saudis are very well

positioned to take this battle on. they have long been considered the swing producer in the world because they had a capacity to produce 12.5 million barrels a day. right now they are producing about 9.6 million barrels. so they can go up if there's a shortage somewhere and they can go down very easily. paris is another reason they are in a good position to play a key role in the struggle over the crisis and that is because it has huge reserves. jan mentioned $750 billion. the third largest after china and japan and compared to the size of its budget which is

$228 billion this year has enough for reserves, it didn't get a penny from oil for the next three years. most of the people think the break-even point, the price it needs to cover the budget is somewhere around $85 a barrel. some estimates put it at $93 or $97 of barrel. it depends on their level of spending which they are already decrease in after two or three years of high increases to deal with social problems as a result of the arab spring. what we noticed in the last few months is a sharp change in the saudi attitude about what is an acceptable oil price. in a, the oil minist , the oil,

suggesting $100 as a fair price for everybody. in june it went to $150. in august and september the saudis have suggested she dollars a barrel which you already mentioned is good for them and acceptable for opec. what is going on behind all this? i am not dealing with shell, what is happening immediately today, what is going on. what strikes me is this enormous scramble among oil producers for its share of the chinese market. china is going around the world and buying oil at the lowest price they can find and this is

affecting sales to saudi arabia are down. imports from saudi arabia are down. iran's exports to china are down. the chinese are going around the world and buying up oil where they can find it. to my amazement, colombia has become a major exporter of oil to china at a price well below what the saudis sell it to china for. colombia -- colombia's exports have gone up, 60% more to china because they are selling oil for $94 to china and the saudis of selling it for $102.

there is -- china, the termination of producers, not just colombia, iraq started this at the beginning of the year by offering discount prices, and kuwait followed, saudis had their oil prices by $1 to everybody around the world. so this competition over price of oil is about to come to a head with this meeting with opec. what is the effect, to talk about iran and iraq. iran is really hurting. sanctions cut their oil production down to 1 million barrels from 2.5. they are hurting because they can't exports as much as they used to come anywhere near as

much. they have been forced to cut their oil prices in this competition for the chinese market. president rahani was reported yesterday or the day before told the iranian parliament that iran's will revenues are down 3 30%. thisoil revenues are down 30%. this will put enormous economic pressure on the iranians and everyone wonders how this will affect the negotiations over their nuclear program and whether they will be willing to make exceptions because the economic situation is difficult for them. that is one aspect for saudi arabia's neighbor. the other one, iraq, iraq is in real trouble but there are so

many other factors other than the oil price war that is going on and it is hard to tell how much more impact is going to have and they are losing the kurdistan and the north exporting its oil separately from the central government so they are losing a lot of income from that. nobody knows whether the islamic state will end up affecting oil exports. so far it has not. iraqi exports in september and october were 2.5 million barrels so that is quite good. but if the fighting goes further south it could affect them quite substantially. there are a lot of other factors in the price war affecting iraq but i think the most interesting issue is the impact on iran and how it is going to impact their

decisions in nuclear negotiations. >> thanks very much. to start the conversation i would like to explore where the foreign policy implications of the price of oil specifically how does it affect these regimes that have indulged in recently and also the domestic stability of countries like nigeria and more globally whether it strengthens or weakens the united states, but i would like to start with you, talking before this event in 1985 when the price of oil collapsed was kind of like a major, major killer under the soviet regime. one of the prospects that affects russian adventures and in places like ukraine and its near east not now but eventually? >> it will have an impact over time. in many ways the agreement that was made yesterday over gas, you can argue over natural gas in the delivery of natural gas from russia to ukraine was a result

of this economic downturn in russia. .. >> and in that instance the eu is maintaining its sanctions and we consider sanctions in march. if, indeed, there's a change in the sanctions regime