What Oil at $100 a Barrel Would Mean for the World Economy

  • Surging crude prices are posing another headwind for the world economy after President Donald Trump’s “zero” pledge on Iran oil sales.
  • Brent crude has risen about 33% this year and is close to the highest in six months. While higher prices due to strong demand typically reflect a robust world economy, a shock from the constrained supply is negative.
  • Exporting nations will enjoy a boost to corporate and government revenues, while consuming nations will bear the cost at the pump, potentially fanning inflation and hurting demand.
  • Ultimately, there comes a point where higher prices may be damaging to everyone.

(Source: Bloomberg)