If you're selling the black stuff, a higher price equals happier times, right? So oil producer nations must be pretty rosy these days: crude, after all, has doubled since January. Yet Gulf markets are the worst performing on the planet this year – and not just in indebted Dubai. Stocks are also negative in blindingly rich Kuwait. In the third quarter, Venezuela plunged into recession after 22 quarters of consecutive growth, with Goldman Sachs saying a devaluation is “inevitable”. Meanwhile, Mexico, whose economy has hit the skids, has just hedged all of next year's oil exports against prices dropping below $57 a barrel.
One conclusion from all this is that a large endowment of oil is far from a guarantee of protection during a global downturn – either locally or for overseas investors. This goes beyond the so-called resource curse, whereby countries with plentiful natural resources are said to lose competitiveness elsewhere. Rather, it highlights that even oil-rich nations have complex, globally connected and fragile economies. Next year in Venezuela, for example, forecast non-oil government revenues of 12 per cent of gross domestic product will be twice that of oil revenues, according to the Economist Intelligence Unit. Private consumption still represents more than half of output.
More worrying, perhaps, is what all this suggests about global growth next year. It may well be prudent for Mexico to hedge its oil exposure or for Kuwait, say, to cash in its Citigroup stake for a $1bn profit. But neither country might do that if it was genuinely upbeat about the prospects for demand. Global energy use will decline this year for the first time since 1981. Yet the International Energy Agency still expects real oil prices to hit $115 by 2030. It seems that many others, including producer countries themselves, are less sure.