Since the beginning of 2016, competition among oil producers has grown fiercer and will probably force oil prices to remain low for a long time, hurting the earnings of oil-exporting countries across regions, e.g., in the Middle East (including the Gulf Cooperation Council member countries, Iraq and Iran), Africa (Libya, Nigeria, Sudan, Algeria), ASEAN (Indonesia, Malaysia, Brunei) and other exporters such as Russia, Kazakhstan, Azerbaijan, Norway, Venezuela, Colombia, Bolivia and Ecuador. These countries will have a very hard time escaping the oil price crisis.
Over the short term, economic weakness facing countries heavily reliant on oil export earnings will impact Thailand's trade and tourism directly and indirectly this year. Talks between Iran and other key exporters have not helped much.
Oil prices could improve if oil-producing countries work closer together in finding a way to stabilize prices. Only when that happens, Thai shipments to these countries may recover from a 17.6 percent plunge in 2015, perhaps further contracting around 8.0 percent in 2016. If, however, prices remain low at currently USD30/barrel throughout the year, Thailand will probably see exports to these countries tumble close to 17 percent for another year. Businesses trading mainly with oil exporters should diversify risks by branching out into new markets whereby they may make use of existing FTAs between Thailand and those signatories when seeking to market products.
That said, oil prices will not likely shoot up as seen in the past. In this regard, chances are that we may see oil exporters re-strategizing to ensure adequate income by relying less on oil revenue in the near future. This would require us to keep track of economic reforms to be carried out in each respective country. Coming with such reforms are opportunities for Thai companies to expand their market and secure a cut in businesses on which these oil exporters embark, especially in those that match our expertise. These businesses include food and agro-processing, construction, recreation and tourism, as well as technology-related ones. With these nations looking for other ways to generate income, there could be exciting technological innovations spawned out of it.