India must be grateful to the US for falling oil prices

India has experienced a drop in the prices of petrol from Rs 74 per litre to Rs 64 per litre since June and, if the trend continues and it goes below Rs 60/litre, it would be the first time that has happened since May 2011. The government of the day is happy at this advantageous situation but the credit should actually go to the US because of the fracking boom.
Within a very short time, the price of a barrel of oil has dropped from more than $100 to about $70, and gas is now cheaper than it has been in years thanks to America's fracking boom. Fracking is a process through which oil and natural gas are extracted out of shale located miles underground.
This has come as a bother to OPEC, the cartel of oil-producing nations that has historically been able to calibrate the price of oil - and ultimately gasoline - by increasing or decreasing supply. However, in view of the developments in the US, OPEC has announced that it won't fight the price skid by cutting production this time.
Observers interpret this as a sign that prices will continue to fall, and the more costly production technique of fracking could, in the long run, become cost-prohibitive.
The fact remains that while Saudi Arabia, the leader of OPEC, may not have too much of a problem with shale oil being available at $60 per barrel, other OPEC countries may not be able to withstand the steady production and the falling prices it brings. Venezuela and Nigeria need levels close to $100 or above to fund national budgets. Saudi rival Iran is also suffering with the price drop in addition to huge loss in revenue as a result of sanctions that have been imposed due to its nuclear program. Even the economy of Russia is in trouble, and falling oil revenues would mean a problem there also.