Here's Everything That Could Go Wrong in 2016
- Oil at $100, Merkel resigning, cyber-attacks among scenarios
- Surprises more important to consider with Fed protection gone
What If?: A Pessimistic View of a Risky 2016
On a clear March night in Iraq, the desert plain of the Faw peninsula and a Kurdish village near Syria and Turkey go up in flames. The next morning, Islamic State claims responsibility for the destruction of the country’s major oil pipelines.
The world immediately loses 3.5 million barrels of daily exports. As Iraq struggles with repairs, violence erupts in the oil-rich region of the Niger Delta, Algeria descends into chaos on the death of its president and there’s a coup in Venezuela. Bloated inventories protect the global economy for a while, but the industry is operating with the thinnest capacity cushion in years. Crude eventually tops $100 a barrel. The Federal Reserve reverses its rate-raising policy to avert a global recession.