Who profits from plunging oil prices?

Americans are getting some "badly needed relief" at the pump, said Stephen Moore at Fox News. The price of oil has plummeted this year, falling more than 25 percent since June alone, to just over $80 a barrel. The reasons are varied: Slowing economies in Europe and China are driving down demand, and the supply of oil has increased, thanks to fracking in the U.S. and renewed production in conflict zones like Libya. The lower prices could produce an "economic stimulus par excellence" here in the U.S. A sustained decline of this magnitude could translate into more than $200 billion a year of savings for U.S. consumers; drivers in many states can already buy gas below $3 a gallon. Prices could fall even further if the Organization of Petroleum Exporting Countries (OPEC) doesn't get its act together, said Brad Plumer at Vox. The organization still produces about 40 percent of the world's oil, but "bitter divisions" have emerged between member states over how many barrels to release onto the market. If those disagreements aren't resolved at a meeting next month, "oil prices could conceivably keep falling."

I'd bet on that, said Joe Nocera in The New York Times. The oil cartel that brought the world economy to its knees 41 years ago this month has "become a paper tiger" and looks unlikely to recover its former influence. OPEC has simply "lost its ability to control" the global oil supply. Saudi Arabia, in particular, has turned a deaf ear to the pleas of other members to cut back on supply in order to drive prices back up. Flush with cash reserves, the kingdom has made it clear that it cares more about retaining its own market share and less about losing money, "so it will continue to pump out oil regardless of the needs of other OPEC members." That's especially bad news for petrostates like Iran, Russia, and Venezuela, said The Washington Post in an editorial. More than half their state budgets come from oil exports, and "their spending plans depend on high prices: $100 a barrel in the case of Russia, $120 for Venezuela, and $140 for Iran." If oil prices stay low, the loss of revenue in those countries could prove seriously destabilizing, perhaps even provoking unrest or erratic behavior by leaders.

In the U.S., "whether you cheer or boo the plunge depends a lot on where you live and what work you do," said Michael Levi at Politico. The shale revolution bears a lot of responsibility for falling global prices, but those same low prices will crimp U.S. oil producers' profits and, eventually, deter them from drilling, which will "hurt the U.S. economy." Right now, the benefit to consumers still outweighs that risk, but it may not stay that way. We should also "resist the temptation to use what could be a fleeting drop in prices to slow the search for alternative sources of energy," said The New York Times in an editorial. "The fact is that oil prices will always rise and fall in response to geopolitical crises, economic trends, and natural disasters." Just because we have cheaper oil today does not ensure that we will tomorrow. And "the planet, alas, does not have the resilience of oil prices."

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