Cheaper oil has produced winners and losers around the world

Global Business

The decline in oil prices over the past seven months has created good fortune for some, and economic hardships for others. As oil prices continue to decline, policy makers around the world have had to rewrite their global growth forecasts. Brent crude, a type of sweet light crude, is now trading below $50 a barrel, with mixed impact. CCTV America’s Shraysi Tandon reported this story from New York.

Cheaper oil has produced winners and losers around the world

The decline in oil prices over the past seven months has created good fortune for some, and economic hardships for others. As oil prices continue to decline, policy makers around the world have had to rewrite their global growth forecasts. Brent crude, a type of sweet light crude, is now trading below $50 a barrel, with mixed impact. CCTV America’s Shraysi Tandon reported this story from New York.

Consumers across the world are benefiting the most from lower oil prices, as it means cheaper prices at the pump and lower heating bills.

According to the U.S. Energy Information Administration, 200 million drivers in the U.S. will save an average of $750 this year due to lower gas prices.

Certain business sectors, such as the airline industry, are also expected to benefit. Last week, Lufthansa said it predicts its fuel bill for the year to be 13 percent cheaper.

“The other beneficiary as far as sectors would be the automobile industry. Especially the producers of the larger SUVs, trucks and so forth. You would expect those sales now to go up again for the cause and effect that it’s less costly to operate those if you’re a user or consumer,” Tim Speiss, a partner at the accounting firm EisnerAmper said.

The world’s biggest oil importers are also coming out ahead. Countries such as Japan, India, China, Philippines, and Hong Kong are all enjoying cheaper oil imports.

Although Saudi Arabia is one of the world’s largest oil producers, analysts said the country has enough oil reserves to withstand a decline in price. Saudi Arabia controls roughly 22 percent of the world’s total oil reserves.

However cheaper oil is hurting certain energy sectors and economies around the world, especially, in some of the key oil exporting countries.

Russia is experiencing difficulties as the majority of its economy and revenues depend on the production and export of oil, Speiss added.

Countries such as Libya, Iran, Venezuela, and Nigeria are also hurt by the lower oil prices as they rely heavily on revenues from oil exports, and require oil prices to be well over $100 per barrel to balance budgets.