Just a couple of months ago, major oil trading houses were predicting the return of $100 a barrel crude. Now, with oil prices at half that level, Bloomberg takes a look at what the slump means for the world economy.
In short: Energy importers like India and South Africa will benefit, while oil producers such as Russia and Saudi Arabia will be hurt. Central banks under pressure to raise interest rates will get a reprieve, and those looking to revive prices—such as the Bank of Japan—face another headwind.
Ultimately, much depends on how world oil demand shapes up as it gets battered by a stronger dollar and global trade spats, and how the biggest producers react.
With the northern hemisphere winter approaching, the oil-price slump will cushion households and businesses during a period of slowing economic growth. Countries that import oil and have current-account deficits, such as South Africa, will also stand to benefit. China is the world’s biggest importer of oil and is already battling a broader moderation in its economy amid a trade war with the U.S. and domestic challenges.
