I don´t. The oil producer countries earned enormous windfall profits in 2007/08 as oil peaked at $147 and then again in the years 2010 through 2014 as oil prices hovered around $110. Then oil cost more than twice the long term average price of oil (about $50 bloomberg) and floated high above the production costs (here my analysis of this oil bubble driveby). It seems that the producers didn´t use their exaggerated windfall profits wisely.
Take for instance Venezuela. The country has the world’s largest proven oil reserves – its 298 billion barrels exceed even Saudi Arabia’s reserves (268 billion barrels oilprice.com). These resources have been well known for quite some time, but the state own oil monpoly failed to invest in boosting production during the years of high commodity prices, reports Oilprice.com. So, Venezuela has seen production fall by 800,000 barrels per day since 1998, as the lack of investment in new output has been decidedly swamped by the depleting production from existing fields. Venezuela failed because the socialist country`s oil production is a government owned monopoly and therefore inefficient and bureaucratic.
And there are more issues. The oil producer countries together didn´t bother to raise production in 2007/08 as the oil price spiraled to $147. A study by Prof. James D. Hamilton showed that the oil price increase 2007/08 was "as a key development that turned the slowdown in growth into a recession" (econbrowser). Neither raised they production in the period 2010 through 2014 when oil prices around $110 slowed down the global economic recovery significantly.
Most oil producer countries also missed the chance to invest their windfall profits during the oil boom years. It seems that the oil bonanza made them lazy and they banked to much on the easy profits generated by oil prices above $110. The majority of the producer countries took the windfall profits for granted and raised their consumption spending. Venezuela for instance lifted her military spending (consumption in a economic sense) from $1,58 billion in 2003 to $32,13 billion in 2013 (indexmundi). Other countries behaved the same. The Opec member Nigeria raised military spending from $75,9 billion in 2003 to $381 billion in 2013 (indexmundi).
In Nigeria and other countries the overspending problem got aggravated by corruption: "Although oil is said to account for 75% of the Nigerian economy, no-one knows how much the country actually produces or refines because hundreds of thousands of barrels of oil are stolen every day, at each level of the supply chain", reports BBC (bbc). And in the boom years Nigeria´s oil production frequently got reduced by terrorist attacks and strikes of oil workers ( bloomberg dw.com).
Other producer countries have similar problems. Mexico`s petrol industry is a state owned monopoly which is highly bureaucratic and inefficient (cnn). Brazil`s oil companies Petrobras and Eletrobrás are government controlled as well and are also curbed by inefficiency and corruption. In 2008 Brazil discovered huge oil reserves offshore - but nothing happened (theguardian).
Conclusion: Countries like Venezuela & Nigeria relaid to much on the oil bonanza of the recent years. They got lazy and neglected to develop new income sources (Duba which is transforming into an international service center is an example how to do it better). They behaved like someone who gains $1 million in thelottery, gives up his job and spends annually $200,000 for luxury. After 5 years he goes bankrupt. Even Saudi Arabia announced spending cuts to adapt to the new oil price situation (businessinsider).
PS: The image above shows members of an oil strike by supporters of Venezuela`s president (google).
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