Impact of Rising Crude Oil Prices on Global Economies

This technical report analyzes the varying impacts of rising crude oil prices on the economies of Japan, the United States, and Europe, particularly since the beginning of 2024. It outlines how geopolitical tensions, production cuts by OPEC Plus, and recovering demand are driving oil prices higher, which in turn affects inflation and economic conditions in resource-importing countries. The report details the worsening terms of trade for Japan and Europe, highlighting that these regions are experiencing significant trading losses due to their reliance on oil imports. The analysis further estimates the potential effects of crude oil prices reaching $100 per barrel, predicting a deterioration in terms of trade for Japan and Europe while the US may see modest improvements. The report emphasizes the importance of energy self-sufficiency rates in determining the economic impacts of fluctuating oil prices, with Japan's low self-sufficiency making it particularly vulnerable to adverse effects.