Saturday, May 24, 2008

Oil Prices and Shift in Wealth

In a beautiful article in Washington Post (in 2007, but still very relevant) Steven Mufson, points out attention to a major impact of rising oil prices - the transfer of wealth from oil importers to oil exporters and the petroleum companies.

Oil Price Rise Causes Global Shift in Wealth

High oil prices are fueling one of the biggest transfers of wealth in history. Oil consumers are paying $4 billion to $5 billion more for crude oil every day than they did just five years ago, pumping more than $2 trillion into the coffers of oil companies and oil-producing nations this year alone.

The consequences are evident in minds and mortar: anger at Chinese motor-fuel pumps and inflated confidence in the Kremlin; new weapons in Chad and new petrochemical plants in Saudi Arabia; no-driving campaigns in South Korea and bigger sales for Toyota hybrid cars; a fiscal burden in Senegal and a bonanza in Brazil. In Burma, recent demonstrations were triggered by a government decision to raise fuel prices.

Read the full article here.

Post a Comment