The International Monetary Fund (IMF) has made clear its opinion that the recent rise in oil prices has a high chance of leading to inflation and crippled growth worldwide. In a report titled “Lower Oil Reliance Insulates the World from 1970s-style Crude Shock,” the organization noted that geopolitical conflict and tensions have historically caused oil prices to jump to ludicrous levels and warned that we might witness a repeat of the same.
According to the body(IMF), “Rising oil prices may echo the 1970s for some when geopolitical tensions also caused fossil fuel prices to spike.” They explained that though times had changed and price increases were generally contained by production capacity and petroleum reserves in some nations, what was currently available would not be enough to stem the coming tide
.Brent Crude, the oil used as a global benchmark had climbed to $100 and the Ukraine-Russia crisis had only served to push it to above $130, a seven-year high. Though the IMF’s report stated an expectation for global production to rise back to its pre-pandemic average rate of 3.5%, it also warned that it might not be enough and countries should brace up for tough times ahead.
