IntroductionOil is one of the primary sources of energy and is strategic for the development of the modern economy. Oil is an important resource that attracts the interest of stakeholders in managing the country's economy. There are always burning issues whenever an oil price fluctuation occurs and they are discussed in the business cycle and political landscape. Oil is a global commodity where price fluctuation and uncertainty affect countries' global economies. This discussion will examine the factors that determine the price of oil and its effect on a country's economy. These price fluctuations pose risks and threats to governments and business organizations. The discussion will analyze the risks of oil price fluctuations and the threat to an organization. The overall effect of risks and threats can be minimized through the use of derivatives and corporate risk management. The discussion will critically analyze various tools and mechanisms to minimize the impact of risks and threats posed by oil price fluctuations. The discussion will conclude with the identification of some opportunities related to oil price fluctuations. Factors influencing fuel price fluctuations • Crude oil holds significant cost components in the price of diesel and gasoline. The international price of oil is also influenced by numerical factors. According to the US Energy Information Administration, there are seven factors that influence and contribute to crude oil prices. Production The OPEC consortium contributes approximately 40% of global oil production and its export accounts for 60%. % of oil traded on the international market. Due to OPEC's size, its actions on production and supply cuts lead to crude oil price fluctuations worldwide. While reviewing... half of the paper... s. In the long paper contract, the position makes money if the market goes up and loses money when it goes down, while in the short paper position it loses money if the market goes up. Another hedging strategy available for IOCs are swap contracts in which the parties are given the obligation to exchange paper at a fixed price for crude oil for a floating price. Swap providers make the market so in demand and control the premium embedded in the fixed price offered and financial institutions act as intermediaries. Another hedging strategy available to IOCs to reduce risk against price fluctuation is the put option where the IOC has the right but not obligation to sell in a specified period of time or on a specific date in exchange for the payment of a premium. The main risks to be managed in derivatives management for price risk are liquidity, credit, cash flow, basis, legal, tax and operational risks.