If oil prices stay low for an extended period, it will have profound effects on the world. It could lead to a resurgence for natural gas given less amount of drilling in the shale patch. It would lead to even more demand for oil storage which would be bullish for oil tanker stocks.
Political Effects
While these are the obvious, first-order effects. There are going to be ripple effects that aren't clear at the moment. Now is the time to plan for them. For one, it could have a big impact on the election. The fossil fuels industry is one of the biggest donors to Republicans. Already, Sheldon Adelson's fortune has been cut by two-thirds who donated $118 million to Republicans in the 2018 cycle. In contrast, sectors that traditionally support Democrats like health care or tech are seeing less damage so far.
Additionally, massive unemployment and distress in Texas could put that state into play in the 2020 election. Currently, polls in Texas show Trump leading by two to five in the state. In 2016, Trump won the state by 11 points. Texas is turning purple due to demographics and a young, left-leaning, Hispanic population. Additionally, people from blue states keep moving there. A bad economy could result in Texas going blue on election night. At the least, it would force Republicans to spend resources that it would otherwise spend on re-winning states like Michigan, Pennsylvania, Florida, and Wisconsin.
Farmers
Low oil prices will be a deflationary shock that will negatively affect farmers. For one, it means reduced demand for biofuels. Also, importing countries will have less purchasing power especially as it brings about a higher dollar.
The combination of tariffs and low agricultural prices is already causing severe losses for farmers and has resulted in numerous aid packages. Of course, this dynamic also feeds back into politics, as farmers are a major voting bloc in many states who voted in big numbers for President Trump but also taken heavy damage in the trade war.
Stress on Petro States
Countries that rely on oil exports as their primary source of revenue could also be hurt by a "new normal" for oil which can be defined as oil prices under $30/barrel. Their budgets and debt levels are based on much higher levels. Additionally, most debt is dollar-denominated.
Deflation means that cash is the most valuable asset which means the U.S. dollar gets more expensive. In a sense, this is already happening as the U.S. dollar (NYSE: UUP) has basically been flat over the past three weeks despite reflation in many assets like stocks, the Fed's bevy of trillion-dollar programs, and the federal government's numerous aid packages with the clear signal that more is coming if necessary.
These countries may find themselves in a position, where they have to cut spending, sell assets, or default on their debt in order to make their debt payments. This also increases political tension in a sensitive part of the world and emboldens extremists.
Conclusion
The coronavirus outbreak was a human and health story that quickly became an economic story, once it became clear what was necessary in order to fight it. So far, the oil collapse is a financial market story, but it could quickly become a political story if prices do not rebound.