Higher oil prices is a tax on the users of petroleum derivatives, i.e., everybody in the planet, barred a few aborigines and a few places in Sub-Sahelian Africa.
Clearly, funneling USD into OPEC coffers drains purchase power from consumers.
A few questions could be:
1) For how long the present high oil price wave will persist?
If consumers few it will persist for a significant time, they will start changing their habits. Junking gas guzzlers, diminishing their mileage, cutting air travel...
2) Is it going to come down as OPEC re-starting cheating as much as they had before? (Prices are high because they are not cheating as much on their quotas as before.)
Last time around, oil shock of 1973, was in fact the oil boom from the exporting countries perspective. The capacity of OPEC countries to spend their money was higher than their capacity to earn it via exports. That is what triggers cheating on their quotas.
3) Is this the high oil prices that signals dwindling reserves world wide pointing to the end of the oil era?
If higher prices persist for too long, alternative sources of energy -not green stuff- but mainly, ethanol and oil shale sands will become competitive vis a vis gasoline. But that would be only the part of the iceberg above water.
a) If that's so, it would be very interesting to see industries die and other nascent industries taking their places.
Imagine substituting all motors of most of the buildings of NY City to save energy, improving High Voltage transmission lines and its switch gear all over the world.
b) Re-starting hydro power again, restarting nuclear.
c) Aluminum down, copper up.
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