Declining crude oil prices are taking their toll on US petrochemical companies that in the recent past have been riding the shale gas boom and expanding their production using cheaper gas feedstock.

As the US newspaper Wall Street Journal pointed out, natural gas liquids have been a source of profits for energy producers because until recently their prices stayed high even as natural gas prices dropped. However, they also have offered a potential competitive advantage for US petrochemical producers in international competition.

Ironically, prices for NGLs, including ethane, propane, butane, isobutane and natural gasoline, have plummeted in major part because of the US shale boom. According to Oil Price Information Service, which tracks these markets, propane and butane are at more-than 10-year lows.

The glut in the US oil and petrochemicals market is also doing its part to lessen the advantage of US chemical giants. While still facing high fuel taxes, competitors in Europe and Asia stand to improve their position - especially as the price of naphtha has fallen globally along with oil.

Up to now, LyondellBasell and Dow Chemical have been two of the biggest beneficiaries of the shale boom, but they could be among the biggest losers of the ongoing oil price crash, according to analysts at Credit Suisse, who noted that LyondellBasell's shares have lost 34% since early September, and Dow's have dropped 19%.

According to a report compiled by European Parliament's Economic and Scientific Policy Department at the request of the EP's Research and Energy Committee (ITRE), since mid-2014, crude oil prices have fallen by more than 40% in euro terms, due to both sluggish demand and much higher supply. Citing expert opinions, the report also concludes that prices will not recover in the short term.

If petrochemical feedstocks keep growing cheaper, by the reverse token higher consumption of fossil fuels will make a switch to renewable energies costlier, the report says. Although affecting GDP positively, this could also increase deflationary pressure in Europe.