Who wins and who loses on dropping oil prices?

For gas-guzzling countries, a fall in oil prices is usually a cause for celebration. In regular times
the average American burns up 10 litres of oil or oil products a day.

Yet for oil-producing countries-the "economic Petropolis"-such a fall in crude costs will spell
disaster and millions of hardships.

Seeing why oil is called black gold is pure. Once the price was high, oil sales filled the coffers of
corporations and governments in the developing countries. That kept people healthy and
thriving public services.

But now, having oil can be more of a curse than a blessing.

Previously, the International Energy Agency warned that the hardest affected could be Ecuador,
Nigeria, and Iraq, with earnings falling between 50 per cent and 85 per cent – assuming $30 a
barrel of oil prices. It's under $20 a barrel now.

All of their economies were already under strain, and all rely heavily on oil.

Oil accounts for 98.5 per cent of Iraq's export earnings (the bulk of the remainder are gems,
precious metals, fruit and nuts). The report estimates that Iraq's government will now face a
$50bn deficit in spending for the year, even though it was only paying its civil servants, leaving
spending on areas such as health care vulnerable at the worst possible moment.

How much a country spends on oil production determines its vulnerability, too. Saudi Arabia
has one of the lowest oil production, bills-but its reliance on the commodity means that it too
could face a funding gap of more than $100 billion. It is also recovering from the last significant
decrease in 2014 oil prices. Attempts to move into areas like tourism were not enough to close
the void.

It requires the price of oil to be about $85 a barrel to balance government spending accounts.

Interestingly, it was Saudi who intensified the instability of oil prices by promising to raise
supply to pressure its competitor Russia-a nation that is much less vulnerable to crude price
fluctuations.

President Trump has promised funding to the US oil and gas industry (in addition to the $650bn
in subsidies currently provided from the fossil fuel sector). While it is the storage and
distribution problems in the West Texas Intermediate price measure that have created such a
pronounced swing, oil production represents a much lower proportion of the US economy than
in many other nations. And what was it?

In principle, the lower price is a benefit for its drivers and factories-and for those elsewhere.
Usually, countries that are net users will experience a boost-but at present; given the
constraints on travel and development, this is quite muted for most of them.

But it will support the largest consumer of oil, China, which accounts for one-fifth of imports
and is currently stockpiling crude trade base as

Overall the possibility of deeper recessions for producers has risen as the oil price has
plummeted. If sustained, however, the fall could lead further down the path to recovery in
other nations.