The Nations To Be Hit The Worst When Oil Prices Reach $100 A Barrel

The unexpected supply cut by OPEC and its allies sent oil prices soaring, and economists believe that big oil importers such as India, Japan, and South Korea will bear the brunt of the pain if prices reach $100 per barrel, as some have projected.

OPEC+ announced a production cut of 1.16 million barrels per day on Sunday, surprising the oil markets.

“It’s a tax on every oil importing economy,” said Pavel Molchanov, managing director of private investment bank Raymond James.

“It’s not the U.S. that would feel the most pain from $100 oil, it would be the countries that have no domestic petroleum resources: Japan, India, Germany, France … to name some of the big examples,” Molchanov said.

The oil cartel’s voluntary cuts are planned to begin in May and run through the end of 2023. Saudi Arabia and Russia will cut oil production by 500,000 barrels per day until the end of the year, while Kuwait, Oman, Iraq, Algeria, and Kazakhstan will also cut output.

Brent oil futures were recently trading 0.57% higher at $85.41 per barrel, while West Texas Intermediate futures were 0.5% higher at $81.11 per barrel in the United States.

Countries that rely heavily on oil imports

“The regions most hit by the oil supply cut and related crude price jump are those with a high degree of import reliance and a high share of fossil fuels in their primary energy systems,” said director of Eurasia Group, Henning Gloystein.

If oil prices rise higher, even discounted Russian crude will begin to harm India’s growth.

“That means the most exposed are import reliant emerging market industries, especially in South and Southeast Asia, as well as the super-import dependent heavy industries of Japan and South Korea.”


India is the world’s third largest oil user, and it has been buying Russian oil at a significant discount since sanctions were imposed on Russia in response to its invasion of Ukraine.

India’s crude oil imports increased by 8.5% in February compared to the same period last year, according to government figures.

“Although they’re still profiting from discounted Russian gas they are already hurting from high coal and gas prices,” Gloystein said.

“If oil goes up further, even the discounted Russian crude will start to hurt India’s growth.”


Oil is Japan’s most important energy source, accounting for roughly 40% of total energy supply.

“Having no notable domestic production, Japan is heavily dependent on crude oil imports, with between 80% to 90% coming from the Middle East region,” the International Energy Agency said.

South Korea

According to independent research firm Enerdata, oil accounts for the majority of South Korea’s energy needs.

“South Korea and Italy are more than 75% dependent on imported oil,” Molchanov pointed out.

Europe and China are also “highly exposed,” according to Gloystein.

However, he stated that China’s vulnerability was slightly lower due to local oil production, whereas Europe as a whole relied primarily on nuclear, coal, and natural gas in their primary energy mix rather than fossil fuel.

Impact on emerging economies

According to Molchanov, the $100 price tag will have a significant impact on some emerging nations that “do not have the foreign currency capability to support these fuel imports.” He identified Argentina, Turkey, South Africa, and Pakistan as prospective victims.

Sri Lanka, which does not produce oil domestically and relies entirely on imports, is similarly vulnerable, he says.

 “Countries with the least foreign currencies and who are importers will hurt the most because oil is priced in the U.S. dollar,” said founder of Energy Aspects, Amrita Sen, who added that the cost of imports will rise even further if the greenback appreciates.

$100 per barrel won’t be permanent

However, while $100 per barrel may be in the horizon, the higher price point may not last long, according to Molchanov, who added that it will not be a “permanent plateau.”

“In the long run, prices could be more kind of in line with where we are today” — in the region of about $80 to $90 or so, he said.

“Once crude hits $100 a barrel and stays there for a bit, that incentivizes producers to really ramp up output again,” said Gloystein.

(Adapted from

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability

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