Energy & Technology

Discover which countries will be impacted the most if crude oil prices soar to $100

crude oil prices

The recent surprise production cut by OPEC and its allies caused oil prices to soar, leading to concerns that major oil importers such as India, Japan, and South Korea could be severely impacted if crude oil prices reach $100 per barrel, as some analysts have predicted.

According to Pavel Molchanov, the managing director of private investment bank Raymond James, “it’s a tax on every oil importing economy.” He added that countries that have no domestic petroleum resources, such as Japan, India, Germany, and France, would feel the most pain.

The voluntary production cuts by OPEC members, including Saudi Arabia and Russia, are set to begin in May and continue until the end of 2023. While Brent crude futures were trading higher at $85.41 a barrel and the U.S. West Texas Intermediate futures stood at $81.11 per barrel, analysts are predicting that emerging market industries in South and Southeast Asia, as well as heavy industries in Japan and South Korea, will be the most exposed to the impact of higher crude oil prices.

India, the third largest oil consumer in the world, has been purchasing Russian oil at a steep discount since sanctions were imposed on Russia in response to its invasion of Ukraine. However, if oil prices continue to rise, even the discounted Russian crude could start to hurt India’s growth. Government data shows that India’s crude oil imports rose by 8.5% in February compared to the same period last year.

Oil is the most significant energy source in Japan, accounting for around 40% of its total energy supply. With no notable domestic production, Japan is heavily dependent on crude oil imports, with between 80% to 90% coming from the Middle East region, according to the International Energy Agency. Likewise, South Korea relies heavily on imported oil, making up the main bulk of its energy needs, according to independent research company Enerdata. Europe and China are also highly exposed to the impact of higher crude oil prices, although China’s exposure is slightly less due to domestic oil production, while Europe as a whole relies mainly on nuclear, coal, and natural gas rather than fossil fuel in their primary energy mix.


Emerging markets such as Argentina, Turkey, South Africa, and Pakistan, which do not have the foreign currency capability to support fuel imports, will also be negatively impacted by the $100 price tag, said Molchanov. Sri Lanka, which does not produce oil domestically and is 100% dependent on imports, is also very susceptible to a harder hit.

However, while some analysts are predicting that crude oil prices could reach $100 per barrel, it may not be a permanent plateau. Molchanov stated that “prices could be more kind of in line with where we are today” in the region of about $80 to $90 or so. Henning Gloystein, the director of Eurasia Group, added that once crude oil hits $100 a barrel and stays there for a bit, it incentivizes producers to ramp up output again.

In conclusion, the impact of higher crude oil prices is a concern for major oil importers like India, Japan, and South Korea, as well as emerging markets that do not have the foreign currency capability to support fuel imports. However, some analysts are optimistic that the $100 price point may not stay for long and that prices could be more in line with current levels in the long run.

Previous Article

Invictus secures funds for seismic and drilling operations in Zimbabwe

Next Article

Masdar secures 900MW solar projects in Uzbekistan, boosting renewable energy growth

You might be interested in …

Leave a Reply

Your email address will not be published. Required fields are marked *