The price of oil has risen markedly recently and on Tuesday was 99.5 dollars a barrel, the most since 2014, and very close to the magic limit of 100 dollars.
The background has naturally been the conflict in Ukraine, where Russia this week approved pro-Russian breakaway republics in eastern Ukraine and sent troops into the neighboring country.
Read more here: Ukraine crisis: Oil prices rise sharply – stock market crash in Russia
The Western powers responded with sanctions against Putin’s Russia.
Also read: Country after country imposes sanctions on Russia
Concern
This has created particular concern about energy prices, such as oil and gas. Russia is, among other things, the world’s second largest oil producer, with a production of 10 million barrels by 2020, six times as much as Norway.
It is thus feared that the sanctions will lead to even less oil in circulation in The West, which could send extremely high oil prices even higher.
Mark Zandi, chief economist at financial giant Moody’s, says that the effect on oil is by far the largest, and fears in particular the effect on inflation, which is already enormously high in many western countries.
– Oil is probably up to 10 to 15 dollars a barrel as a result of the conflict. If it holds up, it will probably give 30 to 40 cents per gallon (equivalent to 70 øre per liter, editor’s note) in increased price for unleaded petrol. This corresponds to half a percentage point of increased inflation in the US and we are already at 7.5 percent, Zandi says CNBCas the reference to the sky-high price growth in the United States.
High inflation
In Norway, too, inflation is high, largely lifted by high energy prices for electricity, petrol and diesel.
Read more here: New record: Petrol and diesel prices explode
Petrol and diesel prices are now at their highest ever in Norway, a consequence of the sky-high oil prices. When the oil price rises by ten percent, the sales price increases by approx. a third, three percent, according to DNB.
Even though the oil price has been at 100 dollars before, this time it will hit the pump price in Norway much harder, since the Norwegian krone is now much weaker against the dollar than before.
In Norwegian kroner, the oil price has never been close to being as high as it is now.
Read more here: New wild record for Norway: The money is pouring in from the oil industry
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