Oil is the most widely used primary energy, which has been inseparable from economic development. The price of oil has been a topic of general discussion in the political and economic circles. China's rapid economic growth has created an enormous demand for oil, which is heavily reliant on oil imports. This paper reviewed the historical path of international oil price fluctuation, analyzed the transmission mechanism, and the impact of international oil price on China's GDP, CPI, unemployment rate and import and export output. On this basis, the paper puts forward some policy suggestions to deal with the impact of international oil price and alleviate the effects in the future.