From Foreign Policy’s new blog entitled The Call, some thoughts on winners & losers from the steep drop in oil prices and the financial meltdown.  As the report notes, the old Seven Sisters are now among the winners while frontier markets occupy a spot on the loser side of things:

Until the middle of last year, a sharp rise in oil prices figured among the most important developing stories in global politics. Many analysts expected high economic growth to continue for the foreseeable future — particularly in leading emerging markets such as China, India, Russia, and Brazil — enriching and empowering the governments of countries with oil to sell, and generating anxiety among consumers about longer-term access to supply. In July 2008, oil sold at $147 per barrel.

Fast-forward six months. On Jan. 7, oil closed at $42.63. The steep price drop flows in no small part, of course, from the global financial turmoil now dominating the headlines — a meltdown that weighs on economic growth and sharply reduces demand for oil and other key commodities. Oil market players are now more worried about the resilience of demand than security of supply.

In the new industrial and geopolitical environment, speculation has intensified over which countries and energy players are best positioned to weather the downturn — and which ones are more likely to suffer. In other words, who will be the winners and losers? Here are a few answers you might not expect.

Winner: Saudi Arabia

How can Saudi Arabia, a leading oil producer, possibly be considered a winner from a sharp drop in oil prices? The Saudis enjoy windfall profits as much as others do, but it’s important to remember when assessing winners and losers that these are relative terms. When a trend hurts one player less than it hurts his competitors, he can credibly call himself a winner. Saudi leaders have budgeted much more conservatively than regional rival Iran, which is burdened with aging oil infrastructure and the need for high oil revenue to finance diesel imports. Lower prices harm Iran’s economy much more than Saudi  Arabia’s, creating turmoil in Iran ahead of presidential elections in June.

Winner: India

We all know that fast-emerging China has worked up an unquenchable thirst for crude oil. But India actually imports a larger percentage of its oil than China does. To protect its political popularity, the Congress Party-led Indian government subsidizes expensive petroleum products to keep costs low for consumers. That’s even more important for 2009, an election year in India. When prices are high, the Indian government must compromise India’s fiscal health to safeguard its own political capital. Earlier this year, the Congress Party found itself forced to risk a political fight with powerful diesel end-user groups (farmers and bus drivers, in particular) by raising regulated retail diesel prices by 10 percent following a rise in global spot prices. Lower oil prices have now relieved some of that pressure.

India’s national oil companies also benefit from lower prices. They now face less risk of getting priced out of competitive international upstream acquisitions (as they did in Kazakhstan and Angola) as lower oil prices force many of their rivals to become more selective in where, how, and how much they invest.

Winner: International Oil Companies (IOCs)

Like the Saudis, the IOCs (supermajors) are unlikely winners from low oil prices. Certainly, they’re likely to take significant losses in their downstream businesses as demand for refined products falls sharply. But for the most part, IOCs can sustain these losses thanks to a disciplined approach to capital spending. Investments like the high-cost Canadian oil sands projects provide an exception, but IOCs have few upstream projects now underway that require oil prices of more than $40 per barrel to generate reasonable returns.

IOCs will also likely benefit from greater access to reserves as lower prices force many governments that now need a lot more foreign investment to back away from policies that favor domestic firms or seek greater rents from IOCs.

Finally, the big oil companies will likely face less scrutiny in Washington as retail gasoline prices and corporate profits fall. President-elect Barack Obama’s advisors have already signaled that they have no plans to follow through on campaign pledges to tax windfall profits. Lower prices will also slow momentum toward greater spending on efforts to advance alternative fuels. Climate change policies that would impose new burdens on consumers of oil will falter, at least for the near term.

Loser: Russia

Russia remains the largest global oil producer, but its oil sector prospects have deteriorated dramatically as prices have fallen. Policy misjudgments and geological challenges have exacerbated Moscow’s problems. After increasing production capacity from 6 million to more than 9 million barrels per day between 1999 and 2004, Russia’s capacity growth has since slowed sharply and its production outlook is now bleak. According to most forecasts, production will contract in 2009. Output at older fields in western Siberia is declining rapidly, and resource nationalism has undermined investment in newer fields. In greenfield areas like eastern Siberia and the Arctic shelf, the need for substantial infrastructure investment will add to the cost of development. All these problems undermine Russia’s ability to compete for the shrinking supply of global investment capital.

Loser: Frontier Markets

Frontier markets, smaller developing states with emerging economies, have not traditionally been the target of oil industry development efforts. Many of them are geographically remote and lack stable political and regulatory structures for foreign investment. In the atmosphere of “pre-peak oil” worries, reserves in places such as Uganda, the Republic of the Congo, Mozambique, Suriname, Papua New Guinea, and Kirgizstan attracted commercial interest that was driven by so-called junior (or minnow) exploration companies that specialize in identifying attractive geological plays that they hope eventually to pass on to larger companies. But lower oil prices have sharply limited the capital available to these smaller companies as markets cut allocations to the prospects that look most risky. This is a risk not only for these small-cap companies, but also for the economic development of countries that might benefit from their investments.

Loser: New Energy Technologies

Projects to develop new energy technologies are struggling as markets recalibrate expectations for oil prices and, by extension, consumer and government demand for alternative technologies and fuels. This is true for biofuels, coal-to-liquids, oil shale, and many types of oil sands technologies. Development of these fuels has already been dogged by environmental controversy, but with oil prices easing, the energy-security-based arguments for government support of these fuels will look much less politically compelling. Markets for venture-capital-driven clean fuels based on fuel cells and hydrogen are also contracting. Governments will continue to subsidize clean fuels, but with less urgency as retail gasoline prices fall, significantly diminishing public demand for new energy technology.