The cause of the decline in prices is partly due to the economic crisis and subsequent drop in energy demand, but other structural factors were already at work softening oil markets. the main reasons for the change in prices can be attributed to 4 factors: (1) spare capacity for a few years; (2) short term market forces that predict bearish market for a few years (supply, demand, inventory, weather and level of economic growth); (3) milder politics and geopolitics perceived for next few years; (4) Flow of funds out of commodity investments. Revenue losses due to lower oil prices from the end of 2008 create major challenges to the domestic and foreign policies of Iran, Russia and Venezuela where lower income impedes the achievement of fundamental foreign policy objectives that require use of funds; while lower prices present opportunities for the US, Europe, China, Japan and others which may be difficult to recognize and achieve.