So far, enormous oil wealth has been encouraging petrostates to maintain their military spending at much higher levels than those of non-oil-producing countries. This trend is most conspicuous in the Middle East, where military spending in 2014 hit 11.7 percent of GDP in Oman, 10.8 percent in Saudi Arabia and 5.7 percent in the UAE. In the two latter countries, it accounted for about 25 percent of the budget.

Increasing U.S. isolationism will be another consequence. This is due less to lower crude prices than the country's diminishing dependence on oil, both as a revenue source and as a growth driver. Once isolationists in the U.S. have the upper hand in their long-running argument with interventionists, albeit temporarily,China—and later, perhaps, one or two other aspirants—will pick up the mantle of global leadership. A major rearrangement of regional balances of power will follow.

But most importantly, cheap oil will change the way that globalization plays out in oil-producing countries and their regions.

High oil prices have boosted the quantitative dimension of globalization by increasing trade, investment and tourist flows, but have greatly impaired its quality. Russians travelled all over the world, Arabs snapped up London properties and Venezuelans gorged on imported goods. Meanwhile, the petrostates’ elites were busy perpetuating their countries' institutional backwardness. In this topsy-turvy world, greater prosperity and closer integration with developed countries on a purely material level was accompanied by the elites' and populations' growing rejection of market democracy values and, as often as not, by political confrontation with the West. Globalism thrived in body, but its spirit flagged.

Lower oil prices are working to reset the balance. As trade, investment and migrant flows between oil-producing countries and the rest of the world decline, the body of globalism will certainly grow leaner. Its spirit, however, will revive. The full enjoyment of Western comforts and technologies will no longer be compatible with a negation of its values and institutes. Only those countries that embrace modernization and carry it further than they did in the previous oil downcycle can hope not be relegated to a historical footnote. The rest will be condemned to economic enclavization centered on a resource that is steadily losing value.

Now is the time for petrostates to awaken from their long oil dream and choose between the first and the third worlds.

Petr Aven - President of the Alfa Bank; served as Minister of Foreign Economic Relations during Yeltsin government. Vladimir Nazarov - Director of the Finance Research Institute of the Ministry of Finance of the Russian Federation. Samvel Lazaryan - Adviser to Director of the Finance Research Institute of the Ministry of Finance.

Image: An offshore oil rig at sunset. Pete Markham, CC BY-SA 2.0.