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The Impact of Lower Oil Prices on Industrials: Looking Beyond the Obvious

by Steven Elms, Head of Industrials, EMEA, Treasury & Trade Solutions, and Sameer Sehgal, Head of Trade, EMEA, Treasury & Trade Solutions, Citi

Steven ElmsSameer Sehgal

The consequences of the halving of oil prices in recent months are more complex than generally thought. The motivations and business strategies of industrials clients must be scrutinized to ensure that appropriate treasury solutions, trade finance and support are made available, according to Steven Elms, head of industrials, EMEA, TTS and Sameer Sehgal, head of trade, EMEA, TTS.

The dramatic fall in the price of oil, which has more than halved since June 2014, has potentially profound implications for industrials companies. All corporates in the sector – which spans sub-sectors as diverse as automotives, aviation and aerospace, shipping, logistics, paper and packaging, heavy machinery, cement, power technology and construction – are impacted by the price move. However, the implications for each sector vary.