The sharp drop in international oil prices will have what impact on the economy?

On the evening of October 10th local time, international oil prices continued to show a significant decline. WTI crude oil dropped by 3%, closing at $59.209 per barrel, while Brent crude oil futures dropped by 4.8% and approached the $60 per barrel mark, closing at $62.09 per barrel. Notably, the price of New York crude oil futures fell below the $60 per barrel mark on that day, reaching a five-month low. Since the beginning of this year, the price of New York crude oil futures has fallen by 18.8%, and the price of Brent crude oil futures has fallen by 16.81%.

Trump's strong pressure on Saudi Arabia, the drag of the global trade war, the appreciation of the US dollar caused by the Fed's interest rate hike, and the rapid growth of shale oil production have jointly formed the complex background of the oil price decline. The phenomenon of the sharp drop in oil prices has brought various impacts in real life, especially in the economic field. First, it has an impact on the macroeconomy. In many oil-importing countries around the world, every 10% decrease in oil prices can increase GDP growth by 0.15 percentage points. The cost of transportation and manufacturing (such as plastics and fibers) has significantly decreased, and the profit margins of airlines and shipping companies have expanded. The decline in oil prices is transmitted to the consumption end. 92-octane gasoline enters the "6-yuan era", and the reduction in logistics transportation costs may be transmitted to commodity prices, indirectly promoting consumption recovery. At the same time, the decline in oil prices increases consumers' caution regarding future expenditures, which may restrain non-essential consumption. After the sharp drop in oil prices, oil-exporting countries are under pressure, with fiscal revenues significantly reduced, and expenditures on military and social welfare face huge pressure. Although Middle Eastern oil-producing countries have relatively smaller impacts, they need to accelerate economic diversification transformation and reduce reliance on oil exports.

Second, it has an impact on the industrial landscape. Fuel costs account for 30%-40% of airlines' total costs. A decrease in oil prices can significantly improve their profit situation. Taking a medium-sized logistics company as an example, after the oil price drop, it can save about 4,500 yuan in fuel costs per month, which can be used for equipment upgrades and service improvements. At the same time, oil is an important raw material for chemical products, and a decline in oil prices helps reduce the production costs of chemical enterprises and improve their competitiveness. When the oil price drops below $60 per barrel, the break-even point of coal-based olefin projects is breached, and some enterprises are forced to suspend production, delaying the transformation of high-energy-consuming industries. Energy enterprises may reduce investment in new energy and renewable energy, hindering the promotion and application of clean energy.

Third, it has an impact on the geopolitical level. In 2025, OPEC+ showed an intention to increase production, and in combination with the supply expansion in the United States, international oil prices remained at a relatively low level. This marked that the oil-producing country alliance shifted from being a "price guardian" to a "market share competitor". After the United States withdrew from the Paris Agreement, it vigorously developed fossil energy, cancelled support policies for wind and solar energy, and released the potential of oil and gas resources in regions such as Alaska, becoming one of the important oil and gas supply countries in the world. The conflicts in the Middle East and the situation in Ukraine have not yet been completely resolved, and may trigger supply disruptions at any time, thereby pushing up oil prices. The positive signals from the US-Iran nuclear issue negotiations may lead Iran to lift economic sanctions and increase crude oil supply, further depressing oil prices.

Fourth, it has an impact on the financial market. The sharp drop in oil prices may trigger debt defaults by oil companies, and combined with the intensification of global capital flows, it may lead to chain fluctuations in the stock market and bond market. At the same time, the sharp drop in oil prices triggers panic among investors, causing the stock market to fall in tandem, further exposing the risks of derivatives. At the same time, the market value of energy sector stocks shrinks, capital shifts to safe assets such as gold, exacerbating global market volatility.

In conclusion, the sharp drop in international oil prices is like a double-edged sword. In the short term, it brings cost benefits to consumers and enterprises, stimulating consumption and investment vitality. But in the long term, it may weaken the impetus for new energy development, delay the process of industrial transformation, and trigger fluctuations in the financial market and the reshaping of the geopolitical landscape. How to strike a balance between "short-term benefits" and "long-term concerns" will become the core challenge faced by global economic policymakers.