Oil Price and Petrochemical Manufacturing in UAE Essay

Oil Price and Petrochemical Manufacturing in UAE - Essay Example The research investigates the immediate impacts that falling oil prices pose to UAE’s economy. It explores the effects of falling oil prices on UAE’s economy. The relationship between oil production firms and petrochemical producing industries are essential to the research. The research will investigate the impacts and effects of falling oil prices on petrochemical manufacturing in UAE. The falling prices risk the survival of petrochemical manufacturing industries that also contribute to the economic stability and income of UAE. The risked survival may render some of the employees in Petrochemical sector jobless raising the level of unemployment in the country. The unemployment crisis lowers the per capita within the country reducing the country’s Gross Domestic Income (GDP) in turn. Finally, the research will draft and recommend possible solutions to the effects of falling oil prices on UAE’s economy. The International Energy Agency asserts that the fall in oil prices translates into a cut in the production of petrochemical products. The effect of this is a retard in the growth of the petrochemical industries, which are also a major contributor to the UAE’s economy. OPEC reports that a fall in oil prices slows the global growth. A decline in the oil prices increases demand for oil products at the expense of petrochemical products. The source explains the manner in which falling oil prices undermine the competitive advantage of petrochemical products. The reduced competitive advantage lowers the total sales of the products endangering the firms.