Photograph: Freeimages.com/Vinicius Basaglia

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.

Latest news

Merkel calls for fewer EU regulations as nationalist sentiments grow

As voters in the Netherlands, France and Germany show increasing support for nationalist, euro-sceptic political movements ahead of this year's elections, German Chancellor Angela Merkel has called for limits on EU regulations.

French prosecutors transfer Fillon case to investigative judge

The French judiciary has opened a formal investigation in connection with presidential candidate Francois Fillon to examine whether the employment of his wife as a parliamentary employee was a sham, the country's financial prosecutors' office said Friday.

White House bars major news outlets from press briefing

Major news organizations, which were Friday blocked by the White House from attending an informal press briefing, condemned the move just hours after President Donald Trump described parts of the media as "the enemy of the people."

Report: German intelligence spied on BBC, other foreign journalists

Germany's intelligence agency monitored foreign journalists at the BBC, the New York Times and other news organizations from 1999 onwards across several countries, according to a Friday report from Der Spiegel magazine.

Classroom for Islamic religious education opened in Split

A classroom for Islamic religious education, whose equipment was financially assisted by city and county authorities, was opened in the coastal city of Split on Friday.

Ministry say no licences for export of military goods to Saudi Arabia issued in 2016

The Economy, Enterprise and Crafts Ministry on Friday issued a statement regarding media reports about export licences for military goods, stressing that in 2016 it did not issue any licences for the export of military goods to Saudi Arabia.

Croatia for preserving Bosnia's stability

Croatia on Friday supported the stability of Bosnia and Herzegovina (BiH), calling on its authorities to adopt decisions in institutions, after a request by BiH Presidency Bosniak member Bakir Izetbegovic to review a ruling which acquitted Serbia of genocide.

Mexico is not a migrant "waiting room" for US, interior minister says

Mexico will not accept undocumented immigrants from other countries whom the United States plans to deport, Mexico's interior minister said Friday.

Right-wing populist Wilders declines first Dutch election debate

Candidates from nine Dutch parties answered questions from journalists Friday at the first national radio debate of the election campaign, but the leading candidate

Bosnian Croat reps insist on channel airing programmes in Croatian

Being one of the constituent peoples, the Croats in Bosnia and Herzegovina are entitled to a broadcaster that will air programmes in their native language, HNS BiH official Ivan Vukoja said at a news conference in Mostar on Friday.

Same-sex couples in Slovenia can marry

A Slovenian law allowing same-sex couples to marry went into force on Friday and the first civil registrar ceremony, between two women, is to take place in Maribor on Saturday, the town's Vecer daily said.

Moody's changes Agrokor's outlook to negative

The Moody's rating agency on Friday changed its outlook for the Agrokor food retailer from stable to negative, affirming its rating of B3.