Economic Effects of High and Volatile Oil Prices

Growth in the near term remains subdued for oil exporters in the Middle East, North Africa, Afghanistan, and Pakistan (MENAP) region, amid volatile oil prices, precarious global growth, elevated fiscal vulnerabilities, and heightened geopolitical tensions. In addition, declining productivity is dampening medium-term growth prospects. To reduce dependence on oil prices and pave the way for more sustainable growth, fiscal consolidation needs to resume, underpinned by improved medium-term fiscal frameworks. In parallel, structural reforms and further financial sector development would boost foreign direct investment (FDI) and domestic private investment and foster diversification, thus contributing to improved productivity and potential growth.

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Economic effects of low oil prices in Saudi Arabia

International Journal of Information Technology ◽

10.1007/s41870-020-00432-w ◽

2020 ◽

Author(s):

Awad Alharbi

Keyword(s):

Saudi Arabia ◽

Oil Prices ◽

Economic Effects

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The pass through of oil prices into euro area consumer liquid fuel prices in an environment of high and volatile oil prices

Energy Economics ◽

10.1016/j.eneco.2009.07.002 ◽

2009 ◽

Vol 31 (6) ◽

pp. 867-881 ◽

Cited By ~ 40

Author(s):

Aidan Meyler

Keyword(s):

Euro Area ◽

Liquid Fuel ◽

Oil Prices ◽

Volatile Oil ◽

Fuel Prices ◽

Pass Through

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How Digitization Lowers Oil & Gas Industry Break Even Cost

10.2118/204753-ms ◽

2021 ◽

Author(s):

Sebastien Dufour ◽

Rajesh D. Sharma

Keyword(s):

Supply And Demand ◽

Oil Prices ◽

Volatile Oil ◽

Digital Transformation ◽

Gas Industry ◽

Oil Companies ◽

Societal Pressure ◽

Supply Shock ◽

Key Variables ◽

Internal Operations

The Oil&Gas industry has experienced three price crises over the past twelve years. Swings in the key variables of politics, economy and technology affect supply and demand dynamics and consequently oil prices. The rise of unconventional sources brought the industry into a recurrent surplus of supply, putting pressure on prices and the combination of a supply shock, shortage of storage and an unprecedent demand drop brought prices to a 30-years low in April 2020. Although volatile oil prices make it challenging for oil companies to manage their markets, the silver lining in low oil prices is that it forced the industry to focus on rendering their internal operations more efficient. O&G producers cut their costs dramatically to remain profitable. The industry embarked on an optimization path and consequently accelerated the adoption of digital transformation. The COVID-19 crisis along with increasing societal pressure has only been a catalyzer to this digital transformation, unlocking significant operational improvements and reducing carbon emissions. According to the latest Rystad Energy analysis average breakeven price dropped 35% between 2014 and 2018, and an additional 10% over the last 2 years, to a $50 breakeven price per barrel.

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