Falling Oil Prices - Winners and Losers


For the first time in four years, the price of oil has been decreasing steadily.  At the moment, it is down to $60 to $80 per barrel after years of prices above $100. And there are no signs of prices going up in the near future.

One of the reasons for the fall of oil prices is that there is more than enough oil on the world markets.  Saudi Arabia, the world’s largest oil producer has tried to stabilize the prices by producing less oil but other OPEC members have reacted by producing more oil.


Another reason for the cut in oil prices is that the United States has been producing more and more energy from fracking. The oil that is trapped in the rocks of the western US can be extracted at a cheaper price. This means that the US can produce more oil itself and does not have to import oil from foreign markets.

The decrease in oil prices is expected to help the world’s economyEspecially in Europe, the downward movement of oil price is expected to be good for the economy.  China and Japan should also profit from falling oil prices, as they must import almost all of their oil. In most cases low oil prices means lower inflation and people spending more money on goods. Cheap oil prices may also influence the travel market as airline fuel costs should drop.

Some oil exporting countries are the big losers of this downward slide in oil prices. Most of them, for example Venezuela, need higher oil prices to pay for government programs and secure the economy. Russia also needs income from oil and gas. The two natural resources bring the country 70% of its income.  In addition to the falling value of the rouble, the Russian currency, the country also misses over 2 billion dollars of income per year.



On the other side, falling energy prices will not affect Middle Eastern countries that much. The oil producing states of the Gulf region have enough money to withstand lower oil prices for some time.



Related Topics



  • barrel =unit of measurement for oil = 159 litres
  • billion = a thousand million
  • currency = the money of a country
  • cut = reduction
  • decrease = to go down
  • downward movement = when something falls or goes down
  • downward slide = constantly going down
  • economy = the system by which goods and money of a country are produced
  • especially = above all
  • expected to be = people think that …
  • extract = get out of
  • foreign = from another country
  • fracking = special process of drilling into the earth to get oil and gas out of rocks
  • fuel = liquid that cars, planes etc.. need to travel
  • goods = products
  • in addition = also
  • income = money you get for products that you sell
  • inflation = when prices go up constantly
  • influence = have an effect on
  • miss = here: does not get the money it normal gets
  • natural resources = things that nature offers and that we need , like oil, gas, coal, wood etc..
  • near future = soon
  • OPEC = organization of oil exporting countries; group of countries that try to control production and oil prices
  • secure = stabilize
  • stabilize = keep at the same price
  • steadily = slowly, bit by bit
  • trapped = when something cannot escape
  • withstand = resist ,survive