In its September 12 edition, Morgan Stanley’s online newsletter reviewed recent calculations by the Cabinet Office’s Maeda Akira. The calculations indicate that oil would have to go to US$129 per barrel before Japan suffered a shock comparable to the 1979 second oil price shock. By contrast, the US and EU were far more vulnerable, as prices would only have to go to US$81 or US$77, respectively, before they suffered damage on the scale of 1979 and afterwards. Before prices went to those latter levels, the EU and the US would presumably do their utmost to bring them down. Japan could thus count on its western allies to act as tripwires and mobilize on oil prices long before it was forced to.
Related Leave a Comment
No comments yet.