World Energy Outlook 2006

0.9 percentage points higher in 2005 had oil prices not increased by $25 per
barrel, as the rule of thumb described in the previous section would suggest.
The first two oil-price shocks had more pronounced adverse effects on GDP
growth partly because the world economy at that time was in a less healthy
state and oil-import intensities were also much higher. In those episodes, prices
rose much faster as a result of a supply shock, which contrasts with the
trajectory of the demand-led price increases since 1999.
Strong global economic growth has also contributed to higher prices for
non-oil exports, offsetting to varying degrees the impact of higher energy
import prices on the terms of trade. The prices for most non-oil commodities
have also risen since the beginning of the decade – sharply in some cases
(Figure 11.21). In effect, the upturn in economic growth and the rise in energy
prices are interlinked in both directions. As many developing countries are
major net exporters of non-oil commodities, the impact of higher energy prices
has, in many cases, been partially compensated or even more than offset by the
increase in the value of exports. In effect, higher export prices provided
additional foreign currency to pay for the higher cost of oil imports. In some
cases, the appreciation of local currencies against the dollar has also boosted the
dollar value of exports (while limiting the impact of higher prices on the oilimport
bill). Better agricultural harvests in some countries in 2005 also helped.
index (2001=100)
400
350
300
250
200
150
100
50
* Projection.
Source: IMF (2006b).
2001
Figure 11.21: Commodity Price Indices
2002
Rubber
Coffee
Timber
2003
Sugar
2004 2005 2006*
Crude oil
Metals
Palm oil
308 World Energy Outlook 2006 - FOCUS ON KEY TOPICS
© OECD/IEA, 2007