The shocks of a world of cheap oil

As oil flirts with prices that call to mind the shocks of the 19708 the usual Cassandras have been warning of dwindling oil supplies and sky-high prices. But the danger is precisely the opposite. The next two decades will witness a prolonged surplus of oil, which will tamp prices down. This world of cheap oil will have serious political reverberations. Without rising oil revenues, such key states as Saudi Arabia, Russia, Mexico, and Colombia will face worsening crises at home. The same is true in spades for Central Asia, where Washington's current wrongheaded policies could drag it into crises that make the Balkans look like a pregame warm-up. The world should worry less about a scarcity of oil than about a glut.