—Oil and gas industries is one of the largest industries worldwide. From the second half of 2014, international oil prices slumped, generating a heavy macroeconomic shock on net oil exporters, particularly those countries whose GDP and exports are dominated by oil. The present study has been undertaken to analyze the impact of the recent oil price crash on five oil dependent economies, biggest oil exporting countries and five countries most affected by the recent oil price crash. Statistically significant results were observed only in few oil dependent economies when macroeconomic factors were regressed against crude oil prices. Falling crude oil prices can impact decision making in monetary, fiscal and structural policies. However, the effects of a decline in the price of oil vary across economies, largely as a result of differences in the patterns of trade in oil-related products and in the oil intensity of production. For net importers of oil, which account for a significantly larger share of global GDP than net exporters, a falling oil price is expected to lead to an increase in the terms of trade, an increase in the purchasing power of households and lower input costs for businesses. For net exporters of oil, the terms of trade are likely to decline, although this will be offset to a greater or lesser degree by the effects on household purchasing power and lower input costs for businesses.
—Crude oil price, GDP, macroeconomic factors, oil price crash.
Indrani Hazarika is with the Dubai Women's College, UAE (e-mail: firstname.lastname@example.org).
Cite: Indrani Hazarika, "An Analytical Study on the Impact of Recent Oil Price Plunge on Highly Oil Dependent Economies and Oil Exporting Countries," International Journal of Trade, Economics and Finance vol.7, no.5, pp. 202-205, 2016.