Asia: Assessing The Impact Of High Oil Prices

Asia investors have once again been fretting about the impact of higher oil prices on the region, as evidenced by some sharp selling on equity markets after strong gains. NYMEX crude has returned to US$49.33/b, which is a hair-breadth below the all-time intra-day high of US$49.40/b reached on August 20. Asian economies are particularly vulnerable to high oil prices, because they import the bulk of their crude requirements. In the case of South Korea and Taiwan, imports must satisfy 100% of oil needs. Higher prices raise the cost of industrial activity and transportation costs, which are in turn passed onto

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