Will the Rising Price of Oil Choke Off Global Trade?

[JohnWxy]

http://benmuse.typepad.com/custom_house/2008/06/will-the-rising-price-of-oil-choke-off-the-global-trade.html


HIGH COST OF CARGO SHIPPING COULD "REVERSE GLOBALISATION," REPORT SAYS

Rising international shipping costs driven by high oil prices could effectively wipe out decades' worth of trade liberalisation, according to new research from CIBC World Markets.

By making it substantially more expensive to ship cargo over long distances, higher freight costs are likely to change global trade and production patterns, said the Canadian investment bank. They may also make it easier for domestic manufacturers to withstand competition from lower-wage countries.

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"At today's oil prices," they write, "every 10 percent increase in trip distance translated into a 4.5 percent increase in transport costs." While shipping a standard 40-foot container from Shanghai to the east coast of the US cost US$3,000 when oil was at US$20 per barrel, it now costs US$8,000. If oil goes up to US$200, the cost would rise to US$15,000.
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These high fuel costs are also very significant in the price of agricultural commodities to those countries that import much of their food.

[DJ13]

1. "REVERSE GLOBALISATION,"

This is why I doubt the corrupted by corporate interests world governments will allow the price of oil to remain high for much longer.

Expect both the US (NYMEX) and British (ICE) governments to crackdown on speculative oil trading in the next few months.

[JohnWxy]

2. The Republicans are fighting like hell against such action in Congress. You may be attributing more

intelligence (relative to greed) to the people controlling our government at least, than they have. IF they were smart they would realize that somewhere close to $5.00 a gallon for gas we will go into a major depression and that would not be good for selling lots of cars, dvds, houses, etc. and thus not good for making money! But they (those who own andor manage the corporations) never seem to be able to think that far ahead.

If gasgoes to $5.00 a gallon, or there-abouts, we're going into a major depression, millions will be out of work and we'll take the world's economies with us. (of course we could use a substitute for gasoline to keep the price from going that high - or at least slow it down a few more years to give us more time to adjust. But I very much doubt we will do that. That would cut into EXXON's sales and profits!!).

I may sound pessimistic but I think that's what's going to happen.

[kestrel91316]

3. Yes. Good riddance to globalism.

[tinrobot]

4. To some degree, yes.

Might not be a bad thing for domestic production.

[excess_3]

5. depend on the US for food, at your own risk. . n/t

[XemaSab]

6. Inshallah

n/t