Oil as a weapon. Will it work?

So, oil is down to around $70 a barrel after reaching dizzying heights in 2011. Previously, whenever prices dropped OPEC members, especially Saudi Arabia, would cut production to reduce supply and support international prices. But not this time. At a recent meeting the Saudis refused to cut production sending the price tumbling. They are forecasting that the price of oil will settle at around $60 a barrel. Normally, the term ' oil bonanza ' refers to the huge inflows of cash received by oil producing nations when the price soars but it can equally be applied to oil importing nations, like India, when the price drops to such low levels. Since we import 80% of our requirement the savings in cash outflow is equivalent to a jump in earnings. It will reduce our Current Account Deficit, bring down inflation, by making transport cheaper, and reduce losses of Indian Railways and our airlines. However, it is easy for an oil bonanza to turn into an ' oil curse ' as citizens of many nations have found to their cost. Countries with oil have less democracy, more corruption and poor industrial base. Politicians typically squander the money by spending on themselves and bribing voters into silence. This must not happen in India. The high price of oil has already been priced into the system so the government should raise taxes to keep prices on the higher side. This will help reduce the fiscal deficit and keep a check on the excessive use of cars, thereby reducing pollution, and preventing a rise in import of oil, which will cancel out the benefits of falling prices. Also, if the price was to jump suddenly taxes could be reduced to cushion the blow. While Indians are smiling the sudden drop in oil price could be catastrophic for other countries. Russia needs oil at $101 a barrel as economic sanctions are costing $40 billion in lost economic activity, the ruble is down 40% and inflation is up to 9%, prompting the central bank to increase interest rate by 1.5% to 9.5%. Nigeria needs oil at $120 a barrel with its currency falling and the cost of fighting Boko Haram rising. Venezuela needs oil also at $120 a barrel with inflation at 60%, shortage of basic necessities and the Bolivar dropping to 83 against the dollar in the black market when the official rate is 6.3. Iran needs oil at $136 a barrel as sanctions are ruining its economy to stop it producing a nuclear weapon, which it is determined to do. Some say that the Saudis want to stop US shale oil production so that prices rise in the long term but US shale will be profitable even at $40 a barrel. But maybe the Saudis are using oil as a weapon because they know that the US is not dependent on them as before, Iran has become stronger with Saddam gone and the Islamic State is threatening the regime. A slippery weapon. Will it work?