Has the increase in crude oil prices affected australian economy?

Question

Has the increase in crude oil prices affected australian economy?

Answer 1

Of course.

Though Australia produces much of its own oil, it is still a net importer of around 300,000 barrels/day:

https://www.cia.gov/library/publications...

http://www.photius.com/rankings/economy/...

Its per capita consumption of oil is also fairly high - higher than most European countries:

http://www.nationmaster.com/graph/ene_oi...

So how can the increase in oil prices not have a major impact?

Furthermore, since Australia is so isolated, the rising cost of petroleum derivatives makes transportation costs to and from Australia significantly higher. That means:

- Australian exports will cost more elsewhere

- Australians will have to pay more for their imports

- fewer tourists will be able to afford traveling to Australia

These will also affect the Australian economy significantly.

In general, the same factors that are increasing oil prices (demand from China and India, etc.) are also increasing the prices for the commodities that Australia exports (coal, iron ore, wheat, etc.) so the Australian economy as a whole is doing fairly well. Still the rising crude oil prices are showing up in higher inflation rates, etc.:

http://www.rba.gov.au/Speeches/2008/sp_a...