Oil and commodities: the end of the "age of abundance" (Inter-Ameri
Lisa Viscidi and Rebecca O'Connor / Inter-American Dialogue Sweeping changes in energy policy are on the horizon for Latin America?s oil-producing countries. Across the region, the sustained decline in global oil prices has had a profound impact on economic growth, political stability and the viability of resource nationalism ? when governments assert more control over the nation?s natural resources. During the “commodities supercycle” of the last decade, many Latin American governments used the record oil windfall to institute energy policies that gave their state oil companies a larger role in the industry and to redistribute more oil wealth to citizens. But two converging and intertwined trends now developing in the region promise to chip away at oil nationalism and introduce more market-friendly policies. On one hand, the drop in the prices of oil and other commodities is contributing to an economic downturn in oil-dependent countries that is weakening incumbent politicians ? many of whom are in leftist governments that favor more state control over the oil industry. The US benchmark crude oil price WTI (West Texas Intermediate) dropped from an average of US$95 in 2011 to US$52 in 2015 due to slowing demand growth, especially from China, and oversupply, mainly ...