It has been a wild few days for global financial markets.
The ruble collapsed, Russia's central bank raised rates, and oil was all over the place, all while equity markets, bond markets, and currency markets around the world were seesawing back and forth.
But what happens next in the global economy depends on one thing: the price of oil.
In a note to clients Tuesday, Capital Economics' John Higgins writes: "Looking ahead, the depth of Russia's problems and the consequences for the global financial markets will obviously depend on what happens next to the price of oil."
Higgins writes that the current price — roughly $56 a barrel for West Texas Intermediate and $60 a barrel for Brent crude — should provide some support. But Higgins adds that he "wouldn't be surprised" if oil prices "fell further in the near term. If that were to happen, the last fortnight of 2014 could be a turbulent one indeed."
Earlier Tuesday, Business Insider's Henry Blodget talked to Mark Dow about what's next for the global economy.
Dow also centered his outlook on what happened next with oil, saying "the speed factor" of oil's price decline was "what has us most on edge. The speed of the price change is almost always more important than the level for our psychology."
And so while the declining price of oil could have some positive effects for US consumers who are dealt cheaper gas prices as a result, both Dow and Higgins are skeptical on the net benefit of this.
Dow and Higgins both made similar points, that while there could be any number of direct causes, it is clear that something has changed in the investing landscape; the appetite for risk has significantly decreased in the past few weeks.
And what happens next has everything to do with where oil goes from here.
Bloomberg.com
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