Emerging Markets To Be Slammed By High Oil Prices

Many emerging markets rely on imported oil. As crude prices rise, their national economies can be badly damaged, according to a new S&P report “Rising Oil Prices Go Beyond Middle East Tensions; Emerging Markets Threatened.” Net exporters which include the US face much more manageable problems.

Anxiety –$100 Oil

The report’s authors write, “Among the major emerging markets, Chile, Hungary, Poland, Turkiye, the Philippines, Thailand, and India are the largest net energy importers. In those cases, during generally high inflation, domestic interest rates are particularly sensitive to higher energy prices.” They also say that central bank interest rates across the globe will stay high, or rise, and oil prices fuel inflation.

The current Middle East crisis is likely to get worse soon, if it worsens at all. The effects on Iran’s exports will create the first wave of an oil crisis. If any other Middle East nations which are huge exporters are affected, crude prices could surge well above $100.

The US does have problems of its own. There is speculation that the Administration will draw on the Strategic Petroleum Reserve which is America’s emergency supply. The US, using this and its current production capacity is likely to weather an oil crisis as well as any nation in the world.