Interesting take on it by Harold James from Princeton.
Oil seems to be going the way of timber and steel, losing its strategic importance. Large amounts of energy will still be needed for the basics of modern life, including data processing and storage, but it will increasingly come from other sources.
This is likely to have epochal consequences, as weakening oil prices undermine the authoritarian regimes that control the main producers. There is a large amount of scholarly evidence linking dependence on natural resources with poor governance – the “resource curse.” Whatever the many differences among Nigeria, Venezuela, Saudi Arabia, Russia, Iran, and Iraq, all have one thing in common: Oil revenues have corrupted the political system, turning it into a deadly struggle for the spoils. As prices fall, the bandits in charge will quarrel more among themselves – and with their neighbors.
The leaders of oil-producing countries are already busy concocting narratives explaining their country’s misfortunes. Venezuela’s President Nicolás Maduro has taken up the Latin American left’s old, populist slogans and pointed his finger at the US. Similarly, Russian officials are drawing parallels between today’s events and the falling oil prices that undermined the Soviet Union. In both cases, the US is to blame; hydraulic fracturing in Oklahoma or Pennsylvania, according to this narrative, is the latest example of America’s projection of power abroad.
In other words, the security challenges implied by dropping oil prices are likely to be more significant than the economic risks…