World Energy Outlook 2006

Figure 11.19: Increase in the Net Oil and Gas Import Bill in 2005 over 2002
OECD
North America
OECD
Europe
OECD
Pacific
Developing
Asia
Oil-importing
Sub-Saharan
Africa
–1% 0% 1% 2% 3%
share of GDP in 2002
Oil
Note: The analysis is based on actual net imports and exports. Negative numbers indicate an increase in the value
of net exports.
Source: IEA analysis.
Simulating the Macroeconomic Effects of Higher Energy
Prices
Energy-import intensity provides a useful gauge of the vulnerability of a
country’s economy to an increase in oil and other energy prices. But, in
practice, the overall consequences of higher prices for growth, the trade
balance, inflation, employment and other economic indicators also depend on
economic structures and conditions, and behavioural and policy responses. For
these reasons, understanding and predicting the actual impact of higher energy
prices requires a quantitative framework or model that attempts to capture the
various economic inter-relationships within and between national economies,
thus allowing the effects of price increases to be assessed in a consistent manner.
While the mechanism by which oil prices affect economic performance is
generally well understood, the precise dynamics and magnitude of these effects
– especially the adjustments to the shift in the terms of trade – are very
uncertain. Quantitative estimates of the overall macroeconomic damage caused
to the economies of oil-importing countries by the oil-price shocks of 1973-
1974, 1979-1980 and 1990-1991, as well as the gains from the 1986 price
collapse, vary substantially. This is partly due to differences in the models used
Chapter 11 - The Impact of Higher Energy Prices 301
Gas
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© OECD/IEA, 2007