As the global oil supply has increased and demand has weakened, prices are down to about $80 a barrel, a more than 25 percent drop since June, and recently fell to a three-year low. What should we make of this shakeup? Will it scramble our economy or upend global politics, doom the Keystone Pipeline or boost American car sales? We asked the country’s leading energy thinkers to tell us how dropping oil prices matter the most—or don’t—for Washington. Here’s what they had to say.

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1. A break for the average American

By Amy Myers Jaffe

The large drop in oil prices should fit the bill “Robin Hood-style” to meet goals set forth by Federal Reserve chair Janet Yellen, among others: Average low-income and middle-class Americans will benefit at the expense of Saudi princes and shale billionaires.

The spike in gasoline prices that reached its peak in 2008 translated into a regressive economic penalty on Americans earning $15,000 a year or less, as gasoline purchases rose to as much as 15 percent of household income for low-income families, more than double the proportion considered normal in the 1990s. Removing this burden on average Americans could help to rally a Democratic Party base that might believe that President Obama is not doing enough to address rising income inequality in the United States. Indeed, the White House is privately hinting that the decline in gasoline prices could have the net effect of a pre-holiday stimulus package, an idea already floated in a recent Goldman Sachs report.

An oil price fall also transfers wealth away from the Middle East and Russia and back to large consuming countries like the United States, helping to reduce our trade deficit even further and supporting the current U.S. economic recovery. Inside the United States, a similar wealth transfer is taking place as the economies of blue states, which are predominantly oil-consuming, benefit at the expense of red states like Alaska, North Dakota, Oklahoma, Texas and Wyoming, which will see their wealth contract. Studies by the U.S. Federal Reserve still show that on balance the U.S. economy benefits overall from lower energy costs, even if some oil and gas jobs will be lost in the American Southwest. So even though Democrats lost the Senate yesterday, in the longer term, falling gasoline prices could help their cause, both by buttressing key sectors of the blue state economy as a positive feature of Obama’s waning second term and by fattening the purchasing power of average Americans.

Amy Myers Jaffe is executive director of energy and sustainability at the University of California, Davis.

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2. A false sense of energy security

By T. Boone Pickens

I’ve been on both sides of a lot of oil and gas price swings. Every time, the first question people always ask is who wins and who loses.

The immediate answer is easy. When prices rise, consumers pay more, while the oil industry profits. When the market is flooded like it is now, low prices benefit consumers but hurt the oil and gas industry. For the country, there’s good and bad on either side. Lower energy prices means consumers can spend more money elsewhere, and higher prices drive the energy industry to invest and create jobs. Over six decades, I’ve made a lot of bets on oil and gas. During price swings, I’ve seen a lot of money come and go fast. Thankfully, I’ve made more good bets than bad ones, but the most valuable thing I’ve learned about energy is that the long-term costs and long-term benefits matter a lot more than the swings.

The key for America is that we shouldn’t let ourselves get distracted by falling oil prices when there is much more at stake. For decades, our dependence on OPEC oil has dictated our national security decisions and tied us up in the Middle East at an incredible price. We’ve spent more than $5 trillion and thousands of American soldiers have died securing Middle East oil. That long-term cost doesn’t get factored in to the price at the pump, so it is critical that we not let ourselves lose sight of the problem and continue expanding American energy production.

Open In New Window OPTICS: In the Path of the Pipeline, by Jeff Jacobson (Click to view gallery)

We have OPEC on the run, but we are still dangerously dependent. We have the domestic resources, but we need to demand that Washington get serious about a national energy plan that takes the real costs of energy into account. We cannot get sidetracked by a false sense of enhanced energy security and lower gasoline prices. We need leadership in Washington on the future of the Strategic Petroleum Reserve, the Keystone pipeline and the questions of whether to lift the ban on crude oil exports and whether to expedite natural gas exports. There will always be winners and losers. Let’s make sure we’re winners.

T. Boone Pickens is founder and chair of BP Capital.

3. Another knock against Keystone

By Bill McKibben

The State Department, when it found last year that the Keystone XL pipeline would have little impact on the flow of oil from Canada’s tar sands, erred in almost every conceivable way: It grossly overestimated how much oil could be carried by train, it failed to figure out that blocking Keystone would wreak havoc on tar sands financing and so on. That’s what happens when you ignore a record number of comments from climate scientists and energy experts.

But even the intellectually (and perhaps actually) corrupt State Department process found that if oil prices dropped—as they now nearly have—to $75, “there could be a substantial impact on oil sands production levels,” to the point where the massive emissions cost would outweigh any economic benefit. At higher production levels, the pipeline would fail even State’s weak version of the president’s “climate test”—his promise that he wouldn’t approve the pipeline if it increased the amount of carbon in the atmosphere. The State Department—lobbied by TransCanada backers with ties to then-Secretary of State Hillary Clinton—did everything it could to set the lowest possible bar for approving Keystone. But in a world of depressed oil prices, as the pressure on the fossil fuel industry builds, even that favoritism isn’t enough to skew the science or show that Keystone is worth building.

Bill McKibben is co-founder and president of 350.org, an international climate campaign.

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4. A pivot back to oil

By John M. DeCicco

The car market and other oil-price-sensitive sectors have already adapted to higher prices. In Washington, falling fuel prices will diminish the anti-oil oratory that too often obscures the immense value that petroleum fuels provide to society. But it’s hard to say whether policymakers will use this breathing room to craft a sound energy strategy, one that prudently manages the risks that accompany large-scale commodity use, rather than continuing futile efforts to “get off oil.”

Saudi Arabian King Faisal kicked sand in Uncle Sam’s face with the 1973 oil embargo, and the Iranian Revolution triggered an even larger price spike in 1979. Ever since then, part of the political response has been the alternative fuel follies, a series of strategies to subsidize and mandate fuels whose only qualification is being made from anything but oil. The most recent are George W. Bush’s initiatives to develop hydrogen vehicles and boost cellulosic ethanol and President Barack Obama’s pledge to put a million plug-in cars on the road by 2015. Biofuel promotion has long had bipartisan support, as now codified in the Renewable Fuel Standard.

Oil prices wax and wane, but the need to tackle climate change rises ever in urgency. But contrary to popular belief, displacing petroleum is not scientifically necessary to mitigate CO 2 emissions from gasoline and other transportation fuels. None of the alternative fuels are cost-effective for doing so, and some policies (notably the RFS) are counterproductive. Instead, we should focus on improving vehicle efficiency and increasing the net rate at which CO 2 is removed from the atmosphere through photosynthesis or similar mechanisms.

A drop in oil prices will undermine the rhetoric of misguided clean-fuel advocates, energy security hawks and other alternative-fuel interests. That will matter a lot if it enables fresh policy discussions that lead to sound solutions for the petroleum part of the climate problem and to rational ways to address oil price volatility.

John M. DeCicco is research professor at the University of Michigan Energy Institute.

5. A geopolitical shakeup

By John Deutch

The drop in price signals a shift in world oil market power that has immediate geopolitical implications, including strengthening the United States’ hand. Some of the major resource holders who generally oppose U.S. interests such as Iran, Russia and Venezuela now face lower revenues and less wealth from their oil, which constrains those governments’ domestic and international power.

For countries that primarily consume oil, the drop in price offers greater diversity of supply and less dependence on a few oil-exporting countries, thereby decreasing the danger of any possible disruption of supply. Meanwhile, energy costs are lower for industry and for families, making oil less of a political influence on these countries’ foreign policy. Large importers such as China, Germany and Japan will likely be more willing to join U.S. sanction efforts against Iran and Russia.

However, falling oil prices also create risks for U.S. foreign policy. Oil-producing countries that are more closely, but not perfectly, allied with U.S. interests—for example, Saudi Arabia and the United Arab Emirates—are experiencing lower oil revenues that restrict investment in their domestic economic and social programs, potentially leading to political unrest. Still, these major resource holders have built up significant reserves and, in general, have a favorable debt-to-GDP ratio to buffer temporarily this decline.

Another important disadvantage for U.S. foreign policy is that lower oil prices bring greater use of oil, resulting in higher carbon emissions that go against the administrations climate change goals and slow the pace of the introduction of renewable technologies.

The period of low oil and gas prices is surely temporary—it will last a decade or two at most. But the United Sates should take advantage of this opportunity with policies that increase North American oil production and export, encourage greater diversity and transparency in new unconventional oil and gas production globally, and build stronger political alliances among major developed and developing consumer countries.

John Deutch is Institute Professor at MIT and a former undersecretary of energy, deputy secretary of defense and director of Central Intelligence.

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6. No geopolitical shakeup

By Ian Bremmer

In this moment of plummeting oil prices, Washington might be tempted to see a geopolitical silver lining: Key U.S. adversaries are dependent on oil exports. Could $75-$80 oil force Iran into a nuclear deal, push Vladimir Putin out of Ukraine or send Venezuela into default? The answer to all these is no. Lower oil prices might pinch these regimes, but they won’t restructure America’s relationships with its antagonists any time soon.

Despite the looming negotiating deadline for a U.S. nuclear deal with Iran, there is still significant distance between the two sides. On top of many other difficult concessions, Iran would have to eliminate most of its existing stockpile of enriched uranium and centrifuges, which looks like a political non-starter for Supreme Leader Ali Khamenei. That’s particularly true when Putin’s Russia wants to undermine the United States—and can do so by supporting Iran. Further compromise might still seal a deal, but that would be the result of creative negotiating and diplomacy, not oil price pressure.

Moscow, for its part, is heavily reliant on oil revenue, a fact that won’t change while Putin continues to wield Russian energy as a political weapon—nothing will deter Putin from his push to destabilize and maintain influence over Ukraine. For the time being, Russia can bear the economic consequences inflicted by Western sanctions and survive cheaper oil. Despite Russia’s massive capital flight and a tilt into recession, Putin still has the will, the foreign reserves and the popular support—his approval ratings are through the roof—to continue his offensive.

The Venezuelan government, meanwhile, already faces a grim economic environment, and oil prices will deepen the strain. A default could cripple the government politically, but President Nicolas Maduro has too much to lose to let that happen. Caracas is already committed to servicing its external debt in the coming year: It will likely implement a managed devaluation and unlock additional liquidity from measures like asset sales and new loans. It would take citizens spilling into the streets to a massive degree for the military to second-guess its support for Maduro, and for now, Caracas can manage that problem.

To truly upend the geopolitical status quo, oil prices would need to drop significantly further, or stay low for the long term. Don’t read much into the price drop just yet.

Ian Bremmer, a Politico Magazine contributing editor, is president of Eurasia Group and a global research professor at New York University. You can follow him at @ianbremmer.

7. A deterrent for energy investment

By Valérie Marcel

I’m thrilled that lower oil prices put a nail in the coffin of the dated “peak oil” theory. The idea of scarcity is always popular when prices rise, but peak oil incorrectly assumed that global (and in particular American) production was imminently set to (or already in) decline. That said, I am more concerned that sustained lower prices could have a damaging impact on long-term capital investments in the energy sector.

The price highs we saw above $100 (for Brent) since 2011 created a sense of urgency that spurred policies and investment in favor of natural gas, solar, wind and energy efficiency. Those alternatives had a greater potential to erode demand for oil in a high oil price environment. But now that prices have fallen, policies restricting emissions will now likely be the major determinant for further investment in alternative fuels.

As for oil companies, they will struggle to convince financial markets to bet on them. Rising capital expenditure costs, lower margins and uncertainty around future climate change policies feed the caution of investors. Some investments will be held back. The result will be further price volatility.

Valérie Marcel is associate fellow at Chatham House.

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8. An opening for a fuel tax

By Edward Chow

After four years of oil averaging $100 per barrel, the fact that prices dropped to $80 level should not have surprised anyone. Oil is a cyclical industry; in fact, even $80 is a very high oil price by historical standards, and we may yet see lower prices before equilibrium is found. This means Washington has an excellent opportunity to address problems it has ignored for years.

For one, we have not had an increase in the federal gasoline tax since 1993, resulting in perennial deficits in the Federal Highway Trust Fund while the nation’s highways, bridges and other infrastructure crumble. On top of that, we need an effective climate policy that addresses realistically our fuel consumption by passenger vehicles; transportation is the second largest source of greenhouse gases in the United States, at more than 25 percent, below only the power sector in emissions.

At the moment, the government mandates vehicle mileage standards as a way of conserving fuel, instead of using the most effective tool we know of: the price signal. As gasoline prices drop below $3 per gallon, we inevitably will see erosion in gains in vehicle efficiency. But lower prices also make fuel taxes more tolerable. Graduated increases in federal transportation fuels tax at a time when prices are coming down and the economy is recovering would have the twin benefits of increasing infrastructure investments, including in mass transit, and reducing greenhouse gas emissions.

Larger increases in federal fuels taxes, beyond the basic needs of the transportation sector, could in turn help the nation reduce its chronic budget deficits and concerns over social security and Medicare funding. (A payroll tax rebate to low-income families can address the regressive nature of the tax increases.) Bold policies to remedy longstanding problems will require our elected officials to debate them clearly and responsibly in the two years between the mid-term and general elections.

Edward C. Chow is senior fellow in the Energy and National Security Program at the Center for Strategic and International Studies.

9. A non-event for OPEC

By Gal Luft

Ten years ago, when oil prices were under $40 a barrel, the idea of $80 oil considered “cheap” would have sounded inconceivable. But let’s not be mistaken: Oil is not cheap even at its new level. It costs the Saudis and their OPEC partners under $5 to produce a barrel so their profit margins are orders of magnitude higher than in any other commodity. In fact, on an energy-equivalent basis the new “cheap” oil is still four times more expensive than coal and natural gas.

While the other fossils compete with each other—as well as with nuclear, solar, hydro and wind power—over market share in the electricity generation sector, oil faces no competition in the sector that matters most for the global economy: transportation. This monopolistic position has allowed OPEC, a cartel that today produces fewer barrels than it did 40 years ago despite controlling more than three-quarters of the world’s conventional reserves, to hike the price gradually in order to meet its member regimes’ budgetary needs. And those needs are only going to rise.

Advice to Washington: Don’t get too comfortable with the new price level, as it is not reflective of a new era of cheap oil but merely a remission in the global economy’s worst affliction: oil’s virtual monopoly over transportation fuels. While OPEC, for tactical reasons, might keep its production level intact over the next few months, it is not likely to do so for very long. Most of its members need higher prices to balance their budgets: Saudi Arabia needs $95 per barrel; Venezuela $120; Iran $140. For these countries, the only possible course of action to avoid economic collapse is to cut production in order to offset the rising supply of North American oil. In other words: higher prices, again. Sinking into complacency and veering off the worthy goal of opening the transportation sector to fuel competition would sow the seeds for a painful oil shock down the road.

Gal Luft is co-director of the Institute for the Analysis of Global Security and senior adviser to the U.S. Energy Security Council.

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10. A window for U.S. to exert itself

By Steve LeVine

American gasoline prices are plummeting, the balance of trade is fast-improving and local economies—the places around the country where the oil and gas booms are under way—are thriving. These are terrific free gets. But the operative words are “free”—and “temporary.” The technological revolution in the oil patch will not last forever.

Whether shale gas and oil keep delivering supply surpluses until the end of the decade or beyond the 2020s, we have a finite window, and it is not a close call as to where to concentrate our focus before it closes. It is in solving vexing foreign policy challenges that at once have become navigable: OPEC’s towering hold on the global economy; Iran’s immovable nuclear policies; Russia’s aggressive insecurity complex; inexorable global warming; and more. The ground underneath not all but a lot of the hard strategic stuff of the past half-century appears to have just shifted. With lower oil prices, we will see more pliability in the economic superstructure that has helped to confound American strategic desires: the single centers of energy gravity in OPEC and Russia.

The first evidence may become visible over just the next three weeks as the deadline approaches for an Iran sanctions-nuclear agreement. To the degree that Iranian Supreme Leader Ali Khamenei believes that these low oil prices will last, he is likelier to be more compromising, albeit at the 11th hour or even in overtime, with American counterparts. This is because $80- to $85-a-barrel oil makes Tehran’s already-tough economic straits even tougher; without a deal to lift or roll back sanctions, Iranian public opinion could strike back.

Taking advantage of low oil prices to address global warming will require greater creativity because the new reality breaks two ways: Low natural gas prices inspire a shift away from more toxic coal, while low oil prices encourage more consumption of gasoline. Policy needs to incentivize the first while discouraging the second.

It’s reasonable to look at the surpluses as an eight- to 10-year window. And there is much to get done before it closes.

Steve LeVine is Washington correspondent for Quartz and author of The Powerhouse: Inside the Invention of a Battery to Save the World, to be published in February by Viking.

11. Another sign of American dependence on oil

By Frances Beinecke

Dramatic swings in oil prices can be friend or foe. Either way, the message to Washington is clear: Our economy is held hostage to global oil price spikes we can neither fully control nor predict. Oil prices are set on a world market guided by a devilish mix of supply, demand and producer country policies. We influence some of those policies, but we certainly don’t control them. Even if the United States increases supplies of a finite resource, scarcity is still cooked into the equation, and the mere fear of shortages can still send prices through the roof.

The permanent fix to oil price shocks is to reduce our reliance on the fuel in two ways: diversify supplies with renewable energy and invest in efficiency, so we do more with less waste. Each day, Americans use about 19 million barrels of oil—enough to fill the Empire State Building three times. Nearly half of that is burned as gasoline in our cars; most of the rest of it powers trucks and aircraft, heats our buildings, lubricates machinery and feeds industrial processes.

We are already on our way to freeing our economy from oil dependence. Thanks to two historic deals between President Obama and big automakers, we will roughly double the gas mileage of new cars—to 54.5 miles per gallon—by 2025. That will cut oil consumption by 10 percent and, at $4 a gallon, put nearly $340 million back into consumers’ pockets each day. We are also seeing more electric cars and hybrids getting more electricity from renewable sources. In the first half of this year, the nation got 5 percent of its electricity from the wind and sun, nearly four times the 2008 level.

These are good starts, but the recent dip in oil prices is a good reminder: Oil dependence holds our workers, families and businesses hostage to global price spikes we can neither fully control nor predict. Let’s beat this rigged game once and for all.

Frances Beinecke is president of the Natural Resources Defense Council.

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12. A red herring

By Kate Gordon

Oil prices are down, which means gas prices are down, and that’s generally good for U.S. consumers and the economy. But it’s also a red herring: Fuel costs should be even lower, what with the growth in vehicle efficiency and new fuel alternatives—including electricity—that allow consumers to move away from gas toward cleaner and often cheaper alternatives.

The more efficient the vehicle, the less its driver is tied to volatile prices at the pump. In 2010, the last time gas prices were below $3 a gallon, the average new light-duty vehicle got 22.1 miles per gallon. Today, the average new vehicle is nearly 15 percent more fuel-efficient, at 25.3 miles per gallon. The result: The recent price drop from $3.49 a gallon (the 2013 average) to $3 a gallon yields in an annual savings of about $300 for the average American driver in a 2010 car. The driver of a 2014 vehicle saves only about $260, but that’s because she’s already using less fuel—putting her $231 ahead, even at the lower price. And that’s just the beginning: Federal regulation requires the average new vehicle to get 40 miles per gallon by 2025. Even better, many Americans are choosing to opt out of oil use altogether: Electric cars are becoming cheaper and more available on the secondary market, with average energy costs equivalent to $1.29-a-gallon gasoline. Biofuels, too, while farther from widespread adoption, are bringing us closer to a future of reduced oil dependence.

These clear market shifts should point Washington toward a new, very achievable bipartisan political goal: helping consumers get off oil faster, so that the inevitable and constant gas price swings matter less to average Americans. Instead, we’re still spending billions to subsidize oil and gas operations, to the tune of more than $4 billion per year. These tax breaks help to keep oil companies afloat even as crude oil prices decline, as Chestnut Exploration’s Mark Plummer recently pointed out. It’s time for Washington to start pushing the economy to one where oil competes on a level playing field with new, cleaner and cheaper technologies—and to stop obsessing about daily variations in the oil price.

Kate Gordon is vice president and director of the Energy & Climate Program at Next Generation.

13. A global market shakeup

By Bill Richardson

Many factors are contributing to the declining price of crude oil. Certainly the demand side of the global market has been soft and will likely soften further. At the same time, with oil trades denominated in dollars, American consumers are benefitting from a stronger greenback. If we add increased fuel switching and continuing efficiency gains to the mix, the market fluctuations we’re seeing begin to look like more enduring changes.

But for policymakers, the supply side of the story might be more important. Simply put, we are witnessing the effects of a supply shock on the global market. Led by the shale revolution, U.S. production of crude oil has risen from about 5 million to nearly 9 million barrels per day. What’s more, steady productivity gains in these wells have driven down costs and increased oil volumes. Oil producers elsewhere in the world have had to take notice of new supply coming out of the United States that is likely to grow well beyond the additional 4 million barrels a day. Surging U.S. production, declining U.S. imports, new supply from Libya and West Africa, and changing economies are reordering global crude oil markets.

OPEC has had to recognize that the changes are real. The cartel’s traditional response to soft demand and weakening prices has been to cut production. That’s why the recent Saudi decision to cut prices unilaterally should have received more attention. If new sources of crude from many new producers are here to stay, the global market will fundamentally change. All of this will have an effect on U.S. trade relationships and will likely raise new diplomatic issues. A world where essential energy commodities are traded by many new market participants is likely to be one that places a premium on the predictability of trade relationships.

Bill Richardson is a former secretary of energy and governor of New Mexico.

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14. A chance to make cars more efficient

By Hal Harvey

The United States has, for 40 years, wasted its treasure, national security and environment in what George W. Bush called an addiction to oil. We sent trillions of dollars to countries that do not like us and devoted massive military forces to nations that otherwise would not merit a mention. A combination of more efficient vehicles and domestic oil development has finally allowed us to drop that yoke. But as oil becomes cheaper, we need to capture this moment, or we will be back in a harness.

To turn this moment into a permanent geostrategic advantage, we need to accelerate the nascent reinvention of the auto—and of trucks. After a truly dumb 25-year plateau in auto fuel efficiency (which set our car companies up for bankruptcy), we have tightened standards, which is finally making the industry serious about new, more efficient technology. Read the car journals today, and you will be amazed at the new engines, drivetrains, electronics, aerodynamics, light-weighting and even tires that can keep us free of petro-ransom. Better trucks are next in line. There is also more room to improve electric vehicles, which will give us, for the first time in history, the chance to have competition between transportation fuels. That augers well for consumers and for our national strategy.

This is a rare gift, almost a half-century in the making: We can save hundreds of billions of dollars, cut unnecessary dependence on Mideast nations and prevent huge amounts of pollution. The track is simple: Keep the auto and truck efficiency efforts going. Keep the technology dynamic at full force. Continuous improvements, driven by strong standards, can finally give us geostrategic freedom.

Hal Harvey is CEO of Energy Innovation: Policy and Technology LLC.

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15. Another dip in the boom-bust cycle

By Terry Lynn Karl

Abrupt changes in price may (or may not) rapidly translate into new global power realities. What determines these power shifts are the extent, durability and volatility of the change in the price of oil. Should the current downward price trend continue through 2015, there are clear (temporary) winners and losers. Consuming countries will feel relief, especially China (a huge importer) and exporters of agricultural products that depend heavily on petroleum inputs. But every government in petro-states using revenues from hydrocarbons to buttress budgets, export foreign policies and remain in power will be under duress—with the partial exception of the world’s largest exporter, Saudi Arabia.

Russia, Venezuela and Iran have the most to lose. Putin’s ability to project into Europe, survive sanctions and sustain his internal popularity could suffer. Russia currently has considerable reserves to use as a cushion, but budgets are out of whack, growth rates are low and the currency has lost value. Should low prices force harsh spending cuts, Vladimir Putin would be in trouble. Venezuela has no such cushion. The runaway inflation, widespread shortages and soaring debt that once brought Hugo Chavez to power now threaten his successor. Iran is even more vulnerable. Not only do sanctions prevent Teheran from borrowing its way through financial trouble, but cheaper oil makes bargaining with the West over its nuclear program harder.

The potential troubles of three leading critics of the United States will bring cheer to some foreign policy experts here, but this could quickly dissipate. Not only do these countries (plus Algeria, Bahrain, Ecuador, Libya, Nigeria and others) have the possibility of descending into violence and/or instability should prices stay low, but their successor governments could be worse. Moreover, Saudi Arabia, a source of 9/11 terrorism and Islamic extremism, will be empowered, perhaps explaining why it has decreased prices in the United States and made little effort to prop them up elsewhere. Thanks to huge foreign assets, the Saudis can self-finance budget deficits for some time. In return, continuing low prices will drive many high-cost competitors out of the market, especially U.S. shale oil and Canada oil sands producers, put a hitch in U.S. industry plans to become a major exporter and increase Saudi Arabia’s market shares.

Cheaper oil also weakens incentives to find alternatives to fossil fuels and dangerously pushes efforts to stop climate change into the future. Geostrategically, the price of oil is not the real long-term issue. While low prices facilitate global economic recovery, this creates new demand with higher prices that permit high cost producers to reenter and flood the market, eventually driving down the price again. This boom/bust cycle—oil was less than $40 a barrel six years ago, $125 two years ago and $77 today—moves crises back and forth between exporters and consumers without resolution, so that fossil-fueled violence and environmental destruction continue unabated. Over time, volatility makes losers of us all.

Terry Lynn Karl is the Gildred professor of political science and Latin American studies at Stanford University.