Oil prices have dropped almost 50 percent since June, and during much of that period analysts emphasized the positive impact the decline would have on consumer spending.
But more recently experts have focused on the downside, and financial markets have tumbled.
"A persistently low oil price could affect producers' ability to maintain domestic infrastructure and in the medium term be a force for geopolitical instability," Michael Hintze, CEO of hedge fund management firm CQS, wrote in a letter obtained by
CNBC.
U.S. adversaries Russia, Iran and Venezuela are dependent on oil income for economic growth.
So are Iraq and Nigeria.
Hintze acknowledged that oil prices' plummet to a five-year low will "broadly-speaking, be positive for the global economy." But lower economic growth overseas has helped spark the plunge in the first place, he pointed out.
Many countries need higher oil prices in order to balance their budgets, Hintze explained. For example, Russia, Iran, Iraq and Nigeria need oil at more than $100 a barrel to meet their obligations.
"One should not underestimate the potential impact of such a sharp fall on regional economies and companies."
January U.S. crude futures were trading at $54.26 a barrel on the Nymex early Tuesday, hitting yet another five-year low.
Many experts expect oil prices to continue plummeting. "This won't stop until oil producers are on their backs," Bjarne Schieldrop, chief commodities analyst at SEB, Sweden's fourth-biggest bank, told
Bloomberg.
"There will be better demand in the second half, hopefully some demand effects from lower prices and definitely softer growth in U.S. shale."
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