This paper provides a thorough analysis of the intricate relationship between oil price fluctuations and the Maltese economy, examining various theories and hypotheses. It discusses the sectoral reallocation of labour, particularly in the tourism industry, in response to oil price changes and scrutinises the Obsolescence Thesis, which posits that rising energy costs render existing capital stock uneconomical, while noting lack of local data for validation. It also explores the concept of ‘Revenue Recycling,’ highlighting the impact on Malta’s terms of trade with oil-producing countries. The paper also examines the ‘Uncertainty Factor’, suggesting that firms may delay investments due to price volatility, while underscoring the challenges of timely policy formulation in Malta, given the delay in statistical reporting.