Global Impact and Implications of Low Crude Oil Prices
With government structural reforms expected in the short term, net oil importers China, India, and South Africa will be able to boost domestic production and consumption because of lower oil prices. This will help drive their competitiveness in the global market as well.
Japan’s domestic consumption is expected to be steady, with an expected increase in exports as overseas economies improve.
With oil production driving the resurgence in the US economy in the past few years, sustained low prices even in the short term are expected to negatively affect exploration and production (E&P). Domestic consumption, however, will increase as consumer spending power improves, driving transportation and residential usage.
The Russian economy is already struggling to cope with the weak ruble. Since the economy depends on oil revenue, lower prices will cause spending in key industries to decline. Sanctions from the West also are restricting the economy.
Federal budgets in Venezuela, Mexico, Libya, and Nigeria depend on oil revenue. Lower prices will have a negative effect on net exporters.
Lower prices have positively affected domestic competitiveness of many downstream industries in Europe, but overall demand patterns are not expected to change.
The impact on Middle Eastern countries varies, with Saudi Arabia expected to fare much better than other members of the Organization of the Petroleum Exporting Countries (OPEC), including Iran, Iraq, and Kuwait.
About this report
This Frost & Sullivan research service offers an overview of the impact and implications of low crude oil prices across developed and emerging economies. It discusses the effects on upstream projects, refining, petrochemicals, polymers, specialty chemicals, biofuels, end-user applications, and gross domestic product of select countries. It provides a list of the top 10 things chemical companies should know, and examines how select companies have been and will be affected.
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