As recently in the middle of 2014, world oil price stood at around $110 a barrel. Today the price is under 40$. Please find the effect of low price from a global perspective:
Russia: Russia loses about 2 Billion USD in revenue for every dollar fall in the oil price-so they’re hurting. Western sanctions are in place due to the country’s support for separatists in Ukraine, and domestic demand for oil is also weak. Even so, they say they will not join OPEC in any eventual cut in production designed to firm up the price.
Europe: Despite the Eurozone’s problems, there has been a surprise increase in Oil demand in Europe –the first for around a decade. Refinery closures have also contributed to the product deficit, driving an increasing need for imports. So these are good news for the storage industry.
The USA: Despite a world surplus of oil, OPEC has broadly continued to maintain production. In turn this has driven down the price of oil and the inevitable slowdown in the US shale has started heavily. However, demand for gasoline in the US continues to look very healthy due to low pump prices.
Latin America: Tough times. One of the hardest hit is Venezuela, where oil accounts for 96% of its international earning. It needs an oil price of around $130 to balance its budget, and is now struggling to maintain supplies of even basic goods (…). Brazil has also been impacted by the slowdown in China, and oil demand across the continent is flat.
Africa: The key producing countries in Libya, Algeria, Nigeria and Angola have all been hit by lower prices for both Oil and Gas. However, North Africa is strong demand from Egypt, mainly for power generation.
China: We hear a lot about China’s slowdown, but the country will still drive one-third of the growth in total word demand for oil. Petrochemical feedstocks, gasoline and jet are all key. China still enjoys an economic growth rate that many countries can only dream about (…)
India: Historically held back by political and structural issues, India is finally starting to outpace China in terms of Economic growth. Its demand growth for oil is also running at the highest level for a generation. Exciting times ahead.
Japan: They’re jumping for joy in Japan. The energy-poor nation spend billions importing fuels, and every 10% fall in the price of a barrel means a bonus of 2.6 trillion Yen. One former chief economist commented that narrowing the country’s budget deficit was “totally paid from abroad” (…) Despite this, it looks probable that the country will fall into recession in 2016.
Iran: Some commentators believe US sanctions have cost Iran more than 200 Billion USD. A low oil price only piles on the pressure. The country holds the fourth largest oil reserve in the World, and if the proposed deal imposing nuclear restrictions comes to fruition, more supply into the global pool will follow.
Saudi Arabia: The country surprised everyone in November 2014 by maintaining production despite surplus world stocks. But despite needing a $90 oil price to balance its books, it still enjoy the lowest cost of production and seems in no hurry to enforce a supply cut and bolster prices.
The Airlines: In 2014, the world’s main airlines made a profit of 16 Billion USD. This figure will double in 2015, entirely driven by a fuel bill that has been slashed. So how come we still have to pay “fuel surcharges” on our tickets ? Good question…
The Car Makers: Reduced pump prices, together with low interest rates and growing consumer confidence in many markets, means a boom for the car industry. In the US, the proportion of not-very-efficient new SUVs is at a 10 year high. In China, the rate of new car sales growth will slip slightly this year, but even then to “only” 20 million vehicles. Gasoline demand worldwide also shows that millions more miles are being driven.
石油圈
