For Japan, which is heavily dependent on imported oil, the sudden drop in price comes as an unexpected gift -- but some analysts fear the country may wind up paying a high price for it.

The country has had considerable success in diversifying its energy sources since its economy was buffeted by the oil crisis of 1973-74, but oil still accounts for nearly 60 percent of its energy supply. Tankers unload nearly 4 million barrels a day in Japan, making it the world's second-largest oil importer after the United States.

The prospect of so much oil suddenly becoming so much cheaper delights many Japanese businessmen, who anticipate that lower energy prices here and abroad will stimulate economic growth and increase corporate profits at a time when the nation's economy has begun to cool down.

"As far as the impact on the Japanese economy is concerned, I think a gradual oil price decline is very good news, no question -- not only to Japan but also to the U.S. and other countries," said Tsutomu Toichi, chief economist of the nonprofit Institute of Energy Economics in Tokyo. "That's the consensus view."

He said that lower oil prices will stimulate Japan's economy by reducing its already low inflation rate, encouraging business investment and boosting domestic consumption, "particularly in the medium term."

Some analysts believe that the nation's oil companies could be among the major beneficiaries. Faced with cutthroat competition that often erupts into domestic price wars amid sluggish growth in demand, many of the more than 30 companies have been losing money in the current fiscal year, which will end on Monday. For example, Nippon Oil Co., the nation's largest oil importer, lost about $35 million in the first half of the period.

The combination of lower oil prices and the stronger yen engineered at the meeting of western finance ministers late last year could help boost those companies back into the black, Toichi said. Now, he added, "I think the Japanese oil industry can enjoy some breathing time to restructure," which will involve consolidating into fewer companies and reducing some of its surplus refining capacity, as the Ministry of International Trade and Industry (MITI) has been pressuring it to do.

A senior executive in the energy division of one of Japan's major integrated trading companies was less optimistic. If crude oil stabilizes at $15 a barrel or lower, he foresees major problems for Japan's oil companies. "Some may go bankrupt or face critical situations" because of the flat market for petroleum products and the difficulty of maintaining profit margins as oil prices decline, he predicted.

The nation's utility companies are well-positioned to realize large gains. About 30 percent of Japan's electricity is generated at oil-fired power plants, and large companies such as Tokyo Electric Power Co. are likely to save hundreds of millions of dollars a year while oil prices remain under $20 a barrel. And because the price of liquefied natural gas (LNG) used by the nation's gas utilities is linked to crude-oil prices, those companies also may reap a windfall.

Industry consumes the largest share of Japan's oil supply -- 52 percent in the latest fiscal year, according to MITI. How soon and to what extent savings in the industrial sector will be passed along to consumers is unclear; oil companies would like to use any profits they realize to shore up their precarious finances, while gas and electric utilities have indicated a reluctance to lower their rates before the end of the current heating season. Yet many analysts agree that consumers ultimately will see lower prices for gasoline at the pump as well as for kerosene, a major fuel used here in residential heating.

Many energy-intensive heavy industries have made great progress in weaning themselves from oil during the past decade; former guzzlers such as the steel, cement and auto industries have switched to other sources primarily coal and LNG and have invested heavily in energy-saving equipment. If prices of such alternate sources are forced down to compete with oil, these industries would benefit as well -- as they will by a general expansion of economic growth.

But a few industries -- most notably petrochemicals, pulp and paper -- still consume petroleum in large quantities and are greeting lower oil prices as a welcome relief following the oil shocks of the 1970s.

Despite bright prospects for many segments of Japan's economy, however, some economists warn of possible dangers. For one thing, Japan's trade surplus, which already is about $50 billion a year, seems certain to grow even larger, because energy resources (primarily oil, coal and LNG) form the largest portion of Japan's imports -- some 45 percent in the latest fiscal year.

A bulging surplus could prove highly embarrassing at a time when Japan is under increasing international pressure to boost imports and spur domestic consumption. It certainly will not make any easier Prime Minister Yasuhiro Nakasone's discussions with western leaders when they convene at the economic summit here in May.

The recent volatility of oil prices also is likely to have a harmful effect. If the price falls very radically, then there likely will be a radical rebound, said Yasuo Hayashi, who directs the Energy Policy and Planning Division of MITI's Agency of Natural Resources and Energy. "We don't in principle like to have that sort of instability" in the world oil market, he said.

Toichi agreed: "Uncertainty is not very good news -- particularly in the energy industry," in which long lead times are necessary to secure new supplies.

Japan, which imports about 70 percent of its oil from the Mideast and North Africa, has been eager to reduce that dependence by developing alternative supply sources. But production costs at the marginal oilfields in which Japanese companies are involved are comparatively high.

Lower oil prices also are certain to set back Japan's efforts to develop alternatives to petroleum, Hayashi said, pointing out that the economics of solar energy, coal liquefaction, methanol and other innovative technologies have suddenly taken a turn for the worse. Even projects launched by the national government will face difficulties, because they depend heavily on the cooperation of private companies, he said.

Energy conservation efforts, too, have lost much of the urgency they acquired after the oil crises of 1973-74 and 1978-79, Hayashi noted.