SAN FRANCISCO (MarketWatch) -- The abrupt slide in oil prices being celebrated by American consumers is a two-edged sword that could complicate U.S. geopolitical relations everywhere from Baghdad to Caracas, industry analysts say.

The price slide gained speed last month as OPEC, led by Saudi Arabia, decided not to cut production. Check out our global map of oil production.

On Monday oil was sliding yet lower, with New York Mercantile Exchange, light, sweet crude futures for delivery in January CLF25, losing $1.46, or about 2.2%, to $64.39 a barrel. Meanwhile, January Brent crude on London’s ICE Futures exchange UK:LCOF5 dropped about 3%, or $2, to $67.06 a barrel.

MarketWatch spoke with researchers and experts across the country to get a sense of how cheaper oil will play out in a variety of locations.

Here are five themes that emerged:

1. Fragile governments will face a lot more stress

Large portions of Iraq and Syria are now under the control of the militant Islamic group alternately known as the Islamic State, or the Islamic State of Iraq and Syria (ISIS).

Before the U.S. bombing campaign began, the group was making as much as $1 million a day smuggling oil to users in Syria and Turkey, according to Treasury Department estimates in late October. However the ability of the U.S. to cut off all the oil is limited because it won’t bomb the actual oil wells, and the refining of the oil is done in simple backyard facilities, according to Joshua Landis, Director of the Center for Middle East studies at the University of Oklahoma.

Falling oil threatens further instability for Iraq. Getty Images

“We’re at our limit in terms of destroying ISIS’s oil supply,” according to Landis, because the U.S. has held off attacking the actual oil wells controlled by the group to avoid having to rebuild them later. Bombing the backyard refineries where the oil is being processed would risk antagonizing the very people the U.S. hopes to assist.

But it’s not just Iraq and Syria.

“Libya remains a very fragile state,” said David Goldwyn , president of Goldwyn Strategies, and a non-resident senior fellow at the Brookings Institute. “The radicalization of the militias in the east [near Benghazi] is on the upswing. The challenge there is that ISIL has demonstrated an intention to market oil that may not be theirs,” rather than just blocking deliveries Indeed, representatives of both the officially recognized Libyan government and the militia groups in the east of the country showed up for the OPEC meeting in Vienna last week.

Nigeria, Africa’s largest crude producer, showing cracks as oil prices nosedive. Getty Images

In Nigeria as well, there are groups competing for the oil. John Campbell, the former U.S. ambassador to the most populous nation in Africa noted that a significant portion of Nigerian oil is stolen, by some estimates as much as 10%, and used to finance political corruption. With declining prices, that “can lead to escalating levels of violence, particularly in the delta,” region of the country.

The competition for the oil in Nigeria has nothing to do with the Islamic insurgency in the north of the country, according to Campbell, who is currently the Ralph Bunche senior fellow for Africa policy studies at the Council on Foreign Relations. “Boko Haram doesn’t have any direct links to the oil patch or the oil industry,” he said.

But the falling price may put the country’s ability to pay for fighting the Islamists at risk. Nigeria recently borrowed $1 billion to buy military equipment to fight the insurgent groups.

2. The curse of oil is alive and well

Venezuela could be a big loser as crude falls. Getty Images

Landis noted that for decades dictatorial regimes have used their oil wealth to buy off their populations with food and energy subsidies without having to reform politically. Now, however, with oil prices falling, that’s becoming harder to do for states in the Middle East and elsewhere.

The price of oil has fallen below the level at which most producer governments can expect to balance their budgets. And while some, like Saudi Arabia, have ample cash reserves to continue subsidies, others, such as Venezuela, are down to their last few billion dollars.

Country 2014 fiscal breakeven oil price 2015 fiscal breakeven oil price Libya* 317 184 Venezuela* 161 151 Yemen 160 145 Algeria* 132 131 Iran 131 131 Bahrain 125 127 Russia 105 107 Saudi Arabia* 98 103 Oman 99 103 Iraq* 111 101 UAE* 79 77 Quatar* 55 60 Kuwait* 54 54 *OPEC member Source: MEES, IMF, Citi Research

In those circumstances, central governments can either crack down on their populations, or risk the kind of separatist insurrections that are playing out in Iraq, analysts say.

Cynthia Arnson, Director of the Latin American Program at the Woodrow Wilson International Center for Scholars said the decline in oil prices “really chips away at the Chavista base because there’s less money to spread around.” Hugo Chavez’s successor, Nicolas Maduro already cracked down on protests in February, throwing a key opposition leader in jail, she noted.

And Maduro moved against another opponent this week, with prosecutors charging her in an alleged plot to assassinate the Venezuelan president. With domestic subsidy programs at risk, “the [government’s] main tool is to deepen the repression,” Arnson said

3. Knock on effects for oil produce client states

Countries that receive subsidies from the oil-producing states could suffer. In the Middle East, for example, Syria gets a great deal of support from Iran and Russia, while Jordan and Lebanon receive subsidies from Saudi Arabia to prop up their regimes, according to Goldwyn.

In the Western hemisphere, Cuba and other Latin American nations like Belize and Nicaragua receive subsidized oil from Venezuela.

If oil prices remain sharply lower for a long time, some of those subsidies may be under pressure, putting those nations that receive them at further risk of internal strife, or crackdowns.

4. Fast-growing populations

Population growth has been fast in many of the oil producing states.

The median age in Iraq and Syria is just 21, according to Landis.

Nigeria’s population is growing at 3% a year. And Brazil is already the world’s 5th most populous country.

More people means more pressure on governments to deliver for their populations or risk internal strife.

5. Oil is still extremely volatile

Factors exist which could push prices even lower, or reverse the fall quickly, according to Goldwyn.

“ “If [OPEC] can drop the price for a year they will do serious damage here in the Midwest.” ” — Joshua Landis, Director of the Center for Middle East studies at the University of Oklahoma

For example, if Iran ever reaches an agreement with western nations on a plan to curb its nuclear ambitions, another one million barrels of oil a day could quickly hit the market once sanctions are lifted, further pressuring prices.

On the other hand, a resumption of infighting among the militia groups in eastern Libya now in control of the oil terminals there could quickly shut off the flow from that part of North Africa again.

Oddly, cheap oil will allow Brazil to lift subsidies but long-term headaches abound. Bloomberg

Low prices could also put development of Brazil’s enormous offshore reserves at risk, according to Paulo Sotero, Director of the Brazil Institute at the Wilson Center. “A barrel below $60 to $65 would basically compromise the development of the pre-salt oil, at least at the speed Brazil would like to do it,” Sotero said.

And if Saudi Arabia succeeds in its apparent goal of making oil too cheap for U.S. oil shale companies to operate profitably, the world could see a return to $100 a barrel oil in relatively short order. “If [OPEC] can drop the price for a year they will do serious damage here in the Midwest,” Landis said.

So while U.S. consumers are enjoying the cheap gasoline prices for now, oil will likely continue to be an interesting and volatile story for years to come.