Setser: The Oil Shock of 2008

Brad Setser, at Follow the Money, presents a couple of graphs on changes in oil export revenue: The Oil Shock of 2008.

The following graph shows the Year-over-year change in oil exports as a percent of world GDP (and in billions of dollars).

This calculation assumes that the oil exporters will export about 45 million barrels a day of oil.

Each $5 increase in the average price of oil increases the oil exporters’ revenues by about $80 billion, so if oil ends up averaging $125 a barrel this year rather than $120 a barrel, the increase in the oil exporters revenues would be close to a trillion dollars.

Assuming oil prices average $120 per barrel for 2008, the increase in 2008 will be similar to the oil shocks of the '70s.