As the lubricant of the global economy, the price of oil can stimulate the world economy - or stifle it.

The current low price of oil has hit many oil-producing countries hard, including Russia. Russian Finance Minister Anton Siluanov said on Monday that Russia will lose almost
$100 billion per year as a result of the price drop of around 30 percent over the past few months. By contrast, he estimated that Western sanctions against Russia have cost it only $40 billion.

Venezuela and Iran are also struggling. Analysts at Deutsche Bank estimated that the oil price would have to be around $160 a barrel for Venezuela to balance its national budget. Iran would need around $125 a barrel. At present, though, the price has dropped below the $80 mark.

Wrangling over production quotas

Together, the 12 OPEC oil producers only account for a third of global oil production. But the organization is able to cut production in order to stabilize the price or to drive it up. According to Deutsche Bank, the cartel has successfully deployed this strategy 11 times since 1984. Russia, which is not an OPEC member, called for production to be cut back ahead of Thursday's OPEC policy meeting.

In an interview with the Russian Tass news agency, President Vladimir Putin adopted a threatening tone while warning of a domino effect in the globalized economy, "The modern world is interconnected. It is far from guaranteed that the sanctions, the drop in the price of oil and the fall of the ruble will have catastrophic consequences for us alone."

The day before the OPEC conference the Russian oil company Rosneft even announced that it would cut production by 25,000 barrels a day, in the hope of sending a signal to OPEC. There was, however, no reaction from the market.

Saudi Arabia sets the prices

Whenever there is talk of reducing production, all eyes usually turn to Saudi Arabia. The desert kingdom is what is known as a "swing producer," according to Leon Leschus, an expert in natural resources at the Hamburg Institute of International Economics. Saudi Arabia is by far the biggest oil producer in OPEC.

"In the past, when there have been deficits in oil production, Saudi Arabia has leapt into the breach and substantially increased its production," Leschus told DW. "Of course, it's easier to increase production, because then you also have bigger revenues, rather than having to decide to cut it back."

Either way, Saudi Arabia has so much power over the market that any action it takes has a significant effect on the price.

The United States also has the ability to influence the price of oil, according to the US investor George Soros. At a podium discussion in Berlin earlier this year, Soros suggested that the US should pour oil from its strategic reserves onto the market to bring down the price of oil as a way of upping the pressure on Moscow. The West has already placed sanctions on Russia and a number of Russians regarding Russian policy toward Ukraine.

"The Russian economy is weak because the oligarchs who control the country don't trust it, and send their money abroad," Soros said. "If you stop the flow of money, you bring the Russian economy to its knees."

The Russian central bank is predicting that capital outflow in 2014 will reach $128 billion - more than double last year.

Conspiracy theories

No wonder, then, that conspiracy theories abound in the run-up to the OPEC meeting. A particularly virulent one is that Saudi Arabia and the US have established a geopolitical cooperation with the aim of putting economic pressure on both Russia and Iran. Frank Umback, director of research at the European Center for Energy and Resource Security at King's College London, pointed out that there is a precedent for this. "In 1986 the oil price fell by more than 50 percent. And that was the start of the economic collapse of the Soviet Union," he said.

However, Umbach said he doesn't believe that the current price drop is the result of the United States and Saudi Arabia cooperating. In fact, he said the rivalry between two oil producers is intensifying.

"Most observers assume that Saudi Arabia wants to see how far the oil price has to fall before it has a serious effect on shale oil production in the US," he said.

Shale oil is obtained through the costly technical process known as fracking, which Leschus said only becomes profitable when the price lies above $80 or $90 per barrel. Over the past few years the American shale oil boom has shaken up the market, turning the US into one of the biggest oil producers in the world.

Oil glut as economic stimulus

There is currently a surplus of oil on the market as demand is lower than supply and forecast to rise only slightly next year. Prior to the OPEC meeting the Reuters news agency reported that the majority of member states had reason to be glad international negotiators were unable to reach a deal with Iran regarding the country's nuclear program. Such a deal could have entailed easing sanctions against Iran and allowing the country to put its oil on the open market.

However, the low price of oil also acts as a stimulus for the global economy. The World Bank estimated that when the oil price falls by 10 percent the global economy grows by 0.2 percent. By this measure, the current price drop would bring about growth of 0.6 percent. If the price were to stabilize at $80 per barrel, the 28 states of the European Union would be paying around 100 billion euros less for oil imports.

On the other hand, over the past 15 years rising oil prices have allowed the energy exporters to make sizeable profits, and these have, at least in part, been behind a development boom from which Germany in particular has benefited: In recent years, around 7.5 percent of German capital goods exports were to the oil-producing states. In this respect, Putin is right: The modern world is indeed interconnected.