WHY: A $2-per-gallon drop in the price of gas saves American motorists $282 billion a year, and lower oil prices translate into cheaper food and consumer goods for everyone.
WHO: Commodity traders
WHY: Hedge-fund managers who “shorted” oil—bet that the price of oil would plummet—s tand to make millions from the collapse.
WHO: OPEC and other oil-rich countries
WHY: Oil money keeps their economies running and governments stable.
WHAT’S NEXT: Declining oil revenue could cause political and economic turbulence in Venezuela, Russia, Iran, and other oil-rich nations. OPEC is cutting production in an attempt to stabilize prices.
WHO: Green technology
WHY: Cheaper gas makes solar and wind power less appealing.
WHAT’S NEXT: T. Boone Pickens’ green-tech fund posted a loss of more than $1 billion. But public funding for energy research will continue.
WHO: Oil-dependent U.S. states
WHY: Oil revenues fund government projects and services.
WHAT’S NEXT: Alaska predicts a 7% drop in oil revenues. Louisiana projects a budget shortfall of $2 billion by fiscal year 2010.
WHO: Oil companies
WHY: Budgets are based on oil priced around $60 a barrel. Recently, the price was about half that.
WHAT’S NEXT: The major companies—ExxonMobil, Shell, BP—will have lower profits but will weather the storm. However, many independent drillers, with tight credit and thin profit margins, may go bust.
— Rebecca Davis O’Brien