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Falling oil prices embarrass and make life difficult for countries that depend on oil exports, including Russia and Venezuela, and the US would enjoy making life difficult for them, economist Richard Wolff told RT.

RT: What's behind the fall in oil prices?

Richard Wolff: A larger factor everybody understands at this sudden and historical time, in a matter of a very few years, is the sudden explosion of oil production inside the US, part of that fracking scandal across the US, about this unorthodox and dangerous ways of getting oil from shale. The end result has been that the US is producing vast amounts of oil, this is becoming available in export markets, and it also means the US buys less oil from the rest of the world. And that is shaking up the oil markets around the world, converting what was a scarcity into a glut, and so the prices go down. Understandably, the Saudis and other major producers do not want to have to cut production in their countries, losing money simply to accommodate the explosion of the production in the US.

RT: Do you foresee that the US will slacken its laws, currently prohibiting oil exports from the country? If yes, how it will affect the global market?

RW: I don’t think the US government will be affected even if it makes some efforts to control this. Even if the oil stays in the US, it means the US is no longer importing oil the way it once was, and that will have the same effect on global oil prices. My suspicion here is that many factors are playing a role. Falling oil prices embarrass and make life difficult for countries that depend on oil exports, like Russia among others, and the US would enjoy making life difficult for them. For other countries, they are reliable allies and really have nowhere to go, even if they are upset by the US, such as Saudi Arabia. So I think it’s a policy that is convenient for the US in saving foreign currency and it’s convenient because it embarrasses and makes life difficult for other countries. If the US wants to offset that, they can give them some foreign aid and some other benefits, meanwhile doing the damage to those countries they would like to see put in greater difficulty.

RT: There have been multiple reports that OPEC won't reduce production to halt the fall. How come they are reluctant to step in when some of the members, such as Venezuela, have been hit hard by the drop?

RW: Absolutely, Venezuela is one of the countries damaged by all of this. The US which is trying very hard, and has been for as long as many of us can remember, to affect regime change in Venezuela. [It] enjoys that this makes the problems for Venezuela go up. I think the same is true of Russia and in some cases other countries around the world. I don’t think that will change as so long as the US doesn’t feel a certain amount of pain from this. That could happen if the anger of the Saudis and others goes to the point of actually of either increasing production or taking other steps that could further depress the price of oil. At a certain point, experts disagree when the price could fall so low that it becomes unprofitable to draw the oil from the shale in the US, and then the US would begin to feel some pain. My guess is before we get there some accommodations will be arrived at by the contending parties. We have an oil market that is in change. The US is changing, the Chinese are beginning to play a major buyer role, and the Russians are entering into agreements with the Chinese, the prospects in Iran, Iraq and elsewhere are very uncertain. So everyone is scrambling to try to make contracts and arrangements that will at least be less vulnerable to the turmoil of a changing market than they would otherwise have to face.