The price chart for crude oil has looked like a water slide in an outdoor pool over the past year and a half. It has been a fun ride for many, while others will nurse their bruises for some time to come.

Oil dropped below 40 dollars a barrel in December, down from a peak of over 100 dollars in June 2014.

Here's a look at how this trend is affecting people, industries and countries in the global economy.


Consumers: People save money as fuel becomes cheaper. In Germany, diesel intermittently dropped below the 1-euro mark per litre towards the end of the year, and heating oil hit a six-year low.

"The oil price decline is like a big tax reduction," said Peter Brezinschek, chief analyst at Austria's Raiffeisen bank. In addition, the oil price slump keeps inflation in check.

Manufacturers: Industries that use a lot of energy or oil will continue to profit, analysts say. This includes steel and machinery makers, pharmaceutical companies and producers of chemicals.

Meanwhile, consumers have more money to spend on durable household equipment, Brezinschek said.

Lower oil prices also help to keep costs down in the transport and aviation sectors.

Industrialized economies: The European Union, the United States and other industrialized economies gain from cheaper oil imports and from stronger consumer demand.

"The recovery is becoming broader and is being driven by consumption rather than exports," European Central Bank chief Mario Draghi said in December, pointing to low oil prices.

Germany's economy, for example, can save up to 20 billion euros (21.9 billion dollars) in energy costs per year, says Claudia Kemfert, the chief energy expert at the German Institute for Economic Research in Berlin.

Emerging economies: Emerging countries that are net oil importers also reap benefits. This includes China, India and Turkey.

However, there is also a downside. "A low oil price helps with economic development, but it also hampers the shift towards alternative fuels or towards better energy efficiency," Kemfert said.


Oil exporters: The price downturn hurts both rich and poor oil production countries. Pumping oil has become less and less profitable as prices have dropped below 40 dollars. Producers whose economies are especially dependent on oil, like Venezuela or Russia, suffer the most.

However, major wealthy exporters like Saudi Arabia and other Gulf countries are also under pressure. The International Monetary Fund (IMF) has warned that the Saudi currency reserves of 660 billion dollars could evaporate within five years.

"It is important that the government accelerate reforms that increase the employment of nationals in the private sector and diversify the economy away from oil," IMF chief Christine Lagarde has warned.

US shale oil producers: As Gulf countries have continued flooding the market with oil, they not only contributed to the price decline, but they also followed a strategy of pricing US shale oil out of the market.

This type of crude oil is extracted from rocks rather than wells, and production costs are higher than in Arab countries.

"Shale drillers in the US have slashed spending and cut the number of workers this year as prices have fallen," the Organization of the Petroleum Exporting Countries, which is dominated by Saudi Arabia, reported in December.

Oil companies: Multinational energy giants have recently seen profits drop and have shelved large-scale investment projects. Shell announced in September that it would stop exploratory drilling for oil in Alaska, a decision that cost the British-Dutch company 2 billion dollars.

Oil firms cut 20 per cent of their spending on developing and operating production sites this year, the International Energy Agency estimates.

The global climate: Some experts warn that cheap oil stands in the way of developing climate-friendly technologies, especially in the automotive and building sectors.

Demand for petrol-guzzling sport utility vehicles is on the rise in countries like the United States and Germany.

"Lower oil can lead to wasteful consumption and to the wrong assumption that oil will remain this cheap for all eternity," Kemfert said.

Related stories

US shale oil producers boost production

BP plans job cuts as profits slump

Russian economy slumps in biggest drop since 2009 crisis

Latest news

Syrian opposition rules out future role for President al-Assad

The Syrian opposition said Friday it would not accept any role for President Bashar al-Assad in the future of the war-torn country, reacting to a recent US shift saying that removing al-Assad is no longer a priority for Washington.

Russian Army integrates breakaway forces of Georgian province

Parts of the small fighting forces of the Georgian breakaway province of South Ossetia have been placed under Russian military control, Russian Defence Minister Sergei Shoigu said on Friday.

Czech Republic's Pilsner Urquell beer is now Japanese

Japanese brewing company Asahi completed its takeover of the Czech brewery Pilsner Urquell on Friday, Asahi said in a statement.

Judge approves 25-million-dollar settlement of Trump University case

A US district judge on Friday approved a 25-million-dollar settlement of lawsuits and state fraud allegations against Trump University, the US president's now-defunct business venture.

Former Thai premier Thaksin to junta on reconciliation: 'Cut me out'

Former Thai prime minister Thaksin Shinawatra on Friday announced that he is not interested in the junta-led reconciliation process, three days after the junta handed him a half-a-billion-dollar tax bill for his past business deal.

Dalic: We welcome possible deal between Agrokor and banks

The government welcomes the possibility of an agreement being concluded between the Agrokor food company and creditor banks, and the bill on vitally important companies is not a fallback plan but the result of the government's care for the overall economic and financial stability of Croatia, Deputy Prime Minister and Minister of Economy Martina Dalic told a press conference in Zagreb on Friday.

Croatia, China sign action plan for cooperation in agriculture

The Croatian and Chinese ministries of agriculture on Friday signed an action plan for cooperation in the field of agriculture for the period 2017-2018, the Croatian ministry said in a statement.

ZSE indices up, Agrokor shares in focus of investor interest

The Zagreb Stock Exchange (ZSE) indices on Friday rose by more than 1.8%, with stocks of the Agrokor food and retail concern being in the focus of investor interest again.

Berlin police defend handling of Berlin market attacker

Berlin police defended themselves on Friday against accusations that they stopped surveillance on Berlin Christmas market attacker despite knowing in June 2016 he was dangerous.

Croatia, creditors tailor emergency measures to save tottering giant

Croatia's tottering retail and food giant Agrokor reached an agreement with its creditors, putting its debts standby and allowing it to continue working during emergency restructuring, the Croatian branch of Austria's Erste Bank said Friday.

Agrokor's creditors say standstill agreement to go into force today

A standstill agreement regarding the Agrokor concern's existing financial obligations to banks will take effect on Friday, additional capital will be injected into the concern in the coming days and the concern will be actively restructured, which includes a change of its management, it was said on Friday after a meeting between Agrokor's suppliers and creditor banks.

Palestinians, UN slam Israel's new settlement plan

Palestinians, Israeli activists and the UN lambasted the government of Israeli Prime Minister Benjamin Netanyahu on Friday, a day after it gave the go-ahead for the first new West Bank settlement in a quarter of a century.

South Sudan rebels release three abducted foreign oil workers

South Sudanese rebels have released three foreign engineers they abducted in early March in the oil-rich Upper Nile region, Foreign Affairs Ministry official Mawein Makol Arik said on Friday.

Turkish opposition: Imprisoned party chief has gone on hunger strike

The head of Turkey's pro-Kurdish opposition party has launched a hunger strike from prison.

European leagues threaten Champions League schedule clashes

The European Professional Football Leagues (EPFL) on Friday threatened schedule clashes on Champions League matchdays in an ongoing dispute with the governing body UEFA.

Danish court revokes citizenship of IS volunteer

A Danish appellate court on Friday stripped a man of his Danish citizenship for volunteering to fight for the extremist Islamic State in Syria.

Banks and Agrokor agree on key elements of standstill agreement

Member banks of the coordinating committee of financial creditors and representatives of the Agrokor food company have in principle agreed on key elements of a standstill agreement, which is expected to be signed later today, announcing changes in the company's management team, Erste Bank said in a statement on Friday afternoon.

Syrian man on trial in Sweden; mosque attack labelled terrorism

A Syrian man went on trial Friday in the southern Swedish city of Malmo, charged with terrorism and arson after an attack last year on a building used as an assembly hall by Shiite Muslims.