The slump in oil prices to levels not seen since the global financial crisis has fanned expectations of deflation, hammered economies of producers and flattened share prices of once high-flying energy companies.
But according to one analyst, lower oil prices could actually help some emerging market economies and refiners by lifting disposable incomes and improving margins.
"Cheaper feedstock costs will support refining margins, while lower import costs will encourage greater consumer spending, driving economic growth in the emerging economies," said Peter Lee, Oil & Gas Analyst at BMI Research on Tuesday.
U.S. WTI and crude oil prices are trading around seven-year lows, tanking after OPEC last week decided not to cut its 30-million-barrel a day production ceiling to support depressed energy prices.
Major producers of refined fuels in Asia include South Korea, Singapore, Japan and Taiwan that rely on crude oil imports to supply the sector.
"Regional demand for oil products at the higher-end of the barrel, notably gasoline and naphtha, remains strong, providing opportunities for refiners to capitalize on higher margin products," said BMI's Lee.
Even as demand for certain refined fuels falters domestically and in certain major export markets, notably China, low import costs will help to provide some support to refiners, he added.
Supported by strong demand for gasoline and aviation fuel, China's November crude oil imports rose 7.6 percent from the same month a year ago, data showed on Tuesday, For the first 11 months, China's crude oil imports rose 8.7 percent to 302.3 million tonnes, or 6.61 million barrels a day.
Low oil prices has also spurred stockpiling by China this year as it builds its strategic petroleum reserve.
Asia's emerging economics like India, Pakistan and the Philippines, where consumer spending is a key driver of growth, will also see some upside.
"Cheaper oil will lead to greater consumer spending and an acceleration of industrialization, underpinning our bullish growth outlook for these economies over the coming years," said BMI's Lee.
Indeed, Australian bank Westpac noted in its latest Asian market report that despite weak private sector confidence in India, the "silver lining" is in low commodities prices, particularly in oil where "lower for longer" views were generally well received by the business community.
The prospects of a prolonged weakness in oil prices--which have more than halved in 18 months--will be anathema to countries that rely heavily on crude exports.
Economies that will be affected are the Asian crude exporters, such as Malaysia, Indonesia, Vietnam, Timor-Leste and Brunei, where oil export revenues constitute a large part of government incomes.
"We expect lower crude prices to lead to a substantial cutback in government s pending while constraining growth prospects over the short-to-medium term," said Lee.
The detrimental impact of low oil prices will be the most pronounced in Timor-Leste and Brunei, where oil exports account for about 73.0% and 96.0% of annual government revenue, respectively, he added.
Despite the recent bout of bad news from Malaysia, including a slump in its currency, massive losses at its state investment fund and a corruption scandal involving the prime minister, the country is not as susceptible to oil shocks.
A major producer and exporter of raw materials in Southeast Asia, Malaysia has been investing in its downstream sectors for years as it moves toward higher-value growth.
"Lower oil prices will be a steady source of cost savings for many businesses across Malaysia, including the transport industry, chemical manufacturers and the computing industry, which is heavily dependent on electricity. Meanwhile, non-oil related exporters will face a double benefit of a more competitive currency and weaker oil prices," said Lee.