The low price of crude oil is expected to last in 2015, shifting incomes from exporting countries like Russia to importers, the World Bank Group said.
Crude oil prices are off about 50 percent from their June highs. The market environment is impacting countries like Russia that rely on oil and gas exports for more than half of their revenue. Even in the United States, were crude oil exports are limited, the price decline has spilled over to other sectors of the economy, with pipe maker U.S. Steel announcing layoffs.
Ayhan Kose, director of development prospects at the World Bank, said the low price for crude oil and the subsequent economic impacts should serve as a reminder of the risks of concentrating economic activity in one sector.
"For policymakers in oil-importing developing countries, the fall in oil prices provides a window of opportunity to undertake fiscal policy and structural reforms as well as fund social programs," he said in a statement.
Saudi Arabia, the de facto leader of the Organization of Petroleum Exporting Countries, said it would keep its oil output steady in an effort to defend its economic interests. OPEC's late November decision to not respond to slumping market conditions drove oil prices even lower.
The World Bank said it's importing countries that benefit from low costs. Analysts say lower gasoline prices, which are pegged to oil prices, are providing a source of tacit economic stimulus to major world powers like the United States.
For investments, however, the bank said weak oil prices are threatening investments in new exploration and production. Several major energy companies, including some of the biggest players in the U.S. shale oil sector, are cutting spending plans in 2015 because of low oil prices.
