Crude oil price is at Peak World economy collapse?


Recently, due to Russia and Ukraine war ,Crude oil price surge near all time high, there is a fear of inflation all over the world. The crude oil price surge from 20$ per barrel to 100$ per barrel. Is all the world economy is slowing down? The answer is no there are some country who gets the benefits most similarly there are some other country who’s economy is struggling. Let’s Discuss in Brief

US Dollar Index Indicate strength of Dollar
Crude oil price

Country whose Economy did not get affected most

Economy of the countries like Saudi Arabia, Iran , United States , Iran ,UAE, Kuwait etc are stable. This countries are also suffering from inflation but the main point is that they are the major exporter of the crude oil hence there trade deficit is in control and there export is increasing. The strength of there currency is increase due there export. For example you can see the strength of the dollar index has been increase from 90 to 104. US Dollar Index indicate strength of the Dollar.

US Dollar Index

Country whose economy affected most

Economy of the countries like India ,China, Europe Economy is slowing down rapidly due to crude oil price. As they are major importer there deficit increase. The strength of the currency is decrease and there currency is depreciate.

As you can see in Chart (below)Indian currency Rupee is depreciate Against Dollar, the Value of USD/INR which was 73.5 is now 77.5 and further expected to Depreciate more. As we know India is one of the major importer of crude oil and Natural resource, Hence trade deficit increasing rapidly. According to RBI there is decline of more than 30$ billion in Forex reserve. As per data of the financial analyst if crude oil price increase 10% the inflation is expected to increase 1%. India inflation is also increasing rapidly, now it is 6.75%. RBI had taken some major steps to control inflation like hike of repo rate.


As you can see in chart (below) the Currency Euro is depreciate against Dollar, the value of the USD/EUR which was 0.820 is now 0.96 and further expected to depreciate more. European countries was Dependent on Russia for Natural resource and crude oil. Due To Russia Ukraine Crisis, European Countries has Reduce there import from Russia. As per the data, European countries has increase their Import of Natural resource and Crude oil from US and middle east. Due to Geopolitical Location the transportation from this countries is expensive then Russia. It also lead to increase in the total cost and hence inflation is expected to Grow.