It's often said that you can't get economists to agree on anything. Well, oil economists certainly can't agree on future prices, with commentators suggesting anything from $20 to $200. Seldom has there been such a discrepancy in forecasting, though the median forecasts seem to be somewhere between $60 and $70.
Since mid-June the price per barrel of petroleum has collapsed by a staggering 37 percent. This almost perfectly mirrors -- in reverse -- the steep rise in oil prices in mid-2008, which was followed by an equally sharp contraction when the Great Recession -- the onset of the global economic and financial crisis -- struck with full fury.
This new oil price drop simply is crushing producers' currencies in foreign exchange markets. The combination of the petrodollar losing its ability to act as a store of value, combined now with exchange rate blues, may be the straw that breaks the producer "camel's back" in respect to OPEC and dollar denomination. Such a moment would seem ripe for Russia and Iran to begin a gradual challenge to Saudi's leadership of the OPEC cartel and to the dollar-denominated energy system, if enough OPEC members and other producers are prepared to rebel. Iran has been lobbying hard in this direction.