The Wobble Before the Fall.(petroleum prices)(Brief article)

Byline: Owen Matthews, Phil Gunson and Maziar Bahari

The era of the oil populists is getting interesting. Oil states enjoyed dizzying visions of power when prices hit $78 last July, and the bonanza emboldened populists like Venezuela's Hugo ChAvez, Iran's Mahmoud Ahmadinejad and Russia's Vladimir Putin to boost spending programs and extend their reach through checkbook diplomacy. Since then, oil prices have bounced as low as $50, exposing how these populists may handle leaner times.

Ahmadinejad and ChAvez are in an odd position--spending heavily enough to fuel inflation, but not well enough to meet rising expectations. Ahmadinejad, in particular, faces rising discontent. In the face of charges of economic mismanagement he has turned conservative, basing this year's budget on an oil price of $34, down from $42 last year. But Iranian M.P. Mohammad Khoshchehreh, a former economic adviser to Ahmadinejad, says this is for show. The "real price in the budget is $46," which the government "has managed to conceal through accountancy tactics." ChAvez ...