You are here: Home » International » News » Economy
Business Standard

Global oil import bill heads for record $2 trillion

Reuters  |  Paris 

Oil consumer nations are set to pay a record $2 trillion this year for oil imports if crude prices do not fall, the Energy Agency (IEA) said on Tuesday, undermining economic recovery.

Crude hit $128 a barrel this month, only $20 short of its 2008 peak, and is up more than 15% since January, largely because of sanctions against oil producer Iran.

"For the first time the world will pay $2 trillion of oil import bills," the IEA's chief economist Fatih Birol told Reuters.

Birol said the bill for importing nations had risen from $1.8 trillion in 2011 and $1.7 trillion in 2008.


If crude were to stay at current levels for the rest of the year - about $125 a barrel for Brent and $107 for US crude - oil import bills would cost 3.4% of GDP, up from 3.1% in 2011, Birol said.

He said the European Union was the hardest-hit of industrialised regions on oil import costs because, when converted into euros, the average EU oil price this year was running higher than in 2008.

Dollar-denominated oil costs mean European consumers pay more when the euro weakens against the dollar. The euro has fallen from $1.49 in May at its peak in 2011 to $1.33 now.

At current prices the bloc will pay $500 billion in 2012 up from $470 billion last year, Birol said. The EU also faced a 2012 gas bill of $120 billion, $20 billion higher than last year.

The cost of oil imports to the United States in an election year would reach a record $426 billion this year, up from $380 in 2011.

China would have to pay $250 billion this year, up $50 billion on 2011.

"If China's slows down as a result of high oil prices then it will have an impact on China but also the rest of the world," said Birol, noting that the world's second biggest oil consumer had helped pull the world out of the 2008 recession.

Japan's bill would swell to $119 billion, up from $178 billion, and India's net import costs will rise to $118 billion, up from $105 billion, Birol said.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Wed, March 28 2012. 08:26 IST
RECOMMENDED FOR YOU
.