The impact of sharply lower oil prices is being felt around the globe. Oil-dependent countries are trying to mend busted budgets. Oil companies are cutting production and workers. While consumers in some countries enjoy lower gas prices, elsewhere consumers are paying higher food prices due to declines in the local currency.
In the U.S.
The government estimates U.S. production will fall to an average 8.7 million barrels a day this year from 9.4 million in 2015.
Oil-dependent states are hit hard. North Dakota faces a $1 billion budget shortfall. Alaska’s gap is an estimated $3.5 billion.
Gasoline is expected to average just $2.03 a gallon this year, down from $2.43, according to the Energy Department.
In Canada
At least 40,000 direct and 100,000 indirect oil jobs have been lost, according to a conservative estimate by the Canadian Association of Petroleum Producers.
Canada’s new government, the Liberal Party of Canada, has promised a stimulus package and is likely to run a larger deficit than the $10 billion previously announced.
Saudi Arabia
Saudi Arabia hiked the price of higher-octane gasoline to 24 cents a liter from 16 cents a liter. According to IEA, the new price is still one-sixth of the comparable price for the UK, one-quarter that of China or one-half that of Iran.
One oil analyst estimated that an initial public offering of 20 percent of Saudi Aramco would fetch $200 billion. Exxon’s total market cap is $309 billion.
Iraq
Production grew by 650,000 barrels a day in 2015, second-largest growth behind the U.S., according to the International Energy Agency.
Oil revenues make up nearly 95 percent of Iraq’s budget. It’s looking at a deficit of about $20.5 billion for 2016.
Iran
In 2011, prior to U.S. sanctions, Iran’s crude oil exports were 2.6 million barrels a day. Exports dropped to 1.4 million barrels a day in 2014.
The volume of daily trading on the Tehran Stock Exchange has increased from $40 million to $133 million since the lifting of most Western sanctions.
Europe/Russia
European oil demand rose to an average 14.4 million barrels a day in 2015, up from 14.1 million barrels a day in 2014, according to the IEA. Demand is forecast to be flat this year.
The International Monetary Fund forecast in November that the Russian economy would shrink by 0.6 percent in 2016. Since then, oil has dropped almost another 40 percent.
Asia
Oil production in China was forecast to fall 0.7 percent this year, even before the latest price declines. Older Chinese wells require up to $40 to produce one barrel. The lower the prices, the faster producers will close them.
India’s costs for imported crude dropped by more than two-thirds since early 2014. The IEA expects demand in India to rise 5.7 percent this year to 4.2 million barrels a day.
Africa
In Nigeria, the naira currency crashed from around 160 to the dollar a year ago to 300 to the dollar.
In Angola, the staple crop, millet, cost more than $1.60 per kilogram (2.2 pounds) in late January, compared to a price of 65 cents a month earlier, reported Jornal de Angola.
Latin America
In Brazil, the state-owned oil company trimmed its spending forecast by 25 percent for the 2015-19 period.
The International Monetary Fund predicts that inflation in Venezuela will surpass 700 percent in 2016.
