Oil-dependent governments are coming under pressure from the lowest crude prices since the COVID-19 pandemic, with officials preparing policy responses for a drop in revenue such as issuing more debt and reducing spending.

The slide in crude prices signals deteriorating confidence in the strength of the economy. And while lower oil prices benefit consumers by, ultimately, reducing prices at the pump, they are a big problem for U.S. oil producers, many of which will struggle to make money drilling new wells at these levels.