If oil was 200 dollars per barrel, about double current price, major economic impacts would occur. Gasoline prices at pump would rise to perhaps 6 to 8 dollars per gallon in US, doubling fuel costs for consumers, increasing cost of driving, shipping, and air travel. Inflation would surge, as oil is input for transportation, plastics, chemicals, and food production, so prices of goods would rise. Airlines, trucking, and shipping companies would face huge cost increases, leading to higher ticket prices and shipping fees. Consumers would cut spending, potentially causing recession, as seen in 2008 when oil hit 147 dollars. Oil producing countries and companies would profit greatly, while oil importing countries would face trade deficits. Demand for electric vehicles, public transport, and fuel efficient cars would increase sharply. Central banks might raise interest rates to combat inflation, slowing economy. Governments might release strategic petroleum reserves, as US did in 2022, to lower prices, and might consider price caps or subsidies. Low income households would be hit hardest by high fuel and heating costs. So 200 dollar oil would cause high inflation, reduced economic growth, possible recession, higher gasoline prices, and accelerated shift to alternatives.
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