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That potential economic slowdown we've been been talking about for months has finally arrived, ushered in by the United States' largest bank failure last week.
Oil, which was feared to be headed for the $200 per barrel mark by the end of this year has finally retreated around $100 and I suspect it will remain there as financial fears continue to spread out from the US.
With Congress and the White House finally agreeing on a $700 billion bailout plan - officially called the Emergency Economic Stabilisation Act - there is probably some hope that oil's slide will slow, even if the strengthening dollar does depress the price even further.
But we probably haven't seen the end of this financial crisis yet.
Even with the bailout plan in place, the American public is increasingly jittery about the economic stability of the country.
Advertisements abound for ways to save cash, get by with less and, no surprise, save on fuel. In the run-up to this mess, there were many of us warning that overheated crude prices would eventually drive consumption down to the point where demand would almost have to shrink. And it has.
What was harder to predict, and makes the current mess so nasty, is that a series of economic crises in the US would drive that demand down even further. Now, with the shock waves from that impact spreading to the rest of the world, demand could dip even further as economies cool.
No surprise, this is not good news for the UAE, or any of the other Organisation of Petroleum Exporting Countries (Opec). Financial institutions around the world have heavily invested in the US property market, and the collapse of several major financial institutions is weighing heavily.
Long story short, liquidity and credit are in shorter supply than they once were, as investors worldwide hunker down.
Nervous
News stories are flooding in from across the globe - investors are nervous, and they have good reason to be.
The UK has nationalised one of the country's largest mortgage lenders and the Europeans are scrambling to save a large Belgian bank.
But economic hotspots in Asia aren't exempt from US financial woes either. China's Prime Minister has been vocal about his concerns that the US economic crisis may drag the Chinese economy down with it and the Indian rupee is headed for some major losses. Asian demand for oil was one of many factors keeping the price of crude higher than expected. With those economies worried, there is definitely potential for a further significant dip in demand for crude, as demand continues to slow.
A decrease in oil revenue is going to hit Gulf Co-operation Council countries hard, especially as credit supplies dry up.
Already, the Central Bank of Bahrain is under orders to do whatever is necessary to isolate that country's economy from the spreading problems, and the UAE's Central Bank has announced that banks could withdraw 100 per cent from their reserve requirements. Both moves are designed to ease any credit crunch caused by a lack of liquidity. But as oil prices remain well below this year's high, and with the potential for economic cooling to ease demand further, Opec nations may be feeling the pinch on more than one front.
- Leah Bower is a journalist based in Alaska.
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