How spiking oil prices are affecting countries around the world

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How spiking oil prices are affecting countries around the world

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ByBen Kesslen

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Oil prices are spiking worldwide as the U.S.-Israeli war against Iran continues, blocking access to the Strait of Hormuz, through which around 20% of the global oil supplies flow.

In the U.S., a national gasoline average hit $3.99 a gallon Monday, the highest price since the summer of 2022, according to AAA. Diesel reached $5.42 a gallon, a more than 40% spike from its pre-war prices.

But the energy crisis is proving to be much more dire abroad — at least for now.

We’ve compiled how a few different countries are responding and the consequences of the global oil price spike.

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Egypt

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Egypt relies on oil to power its electric grid, and the government is concerned about burning its reserves. It imposed closing times for stores, restaurants, and cafes to reduce travel and energy use.

The restrictions are having disastrous effects on small businesses, many of which operate late into the night and do their best business after dark, according to the Associated Press. They created additional frustration because the government exempted tourist areas from the early closures, which it said was necessary for the economy.

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South Korea

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South Korea is considering national driving restrictions in the wake of the oil crisis.

“If the Middle East situation worsens, the crisis alert would have to move ⁠up to the ‘warning’ stage, and around that point we would need to curb consumption," Finance Minister Koo Yun-cheol said Sunday, according to Reuters. The country gets more than two-thirds of its oil from the Middle East.

Last week, South Korea announced a rotation system that restricts when public sector vehicles can drive based on their license plates. Private employees like Samsung have also asked employees to cut back on driving.

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Philippines

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The Philippines declared a national emergency over high oil prices last week, with the government saying it has only have 45 days of fuel left if people keep consuming it at the same rate. It asked the U.S. permission to buy oil from sanctioned countries as it scrambled to get more energy, according to Yahoo Finance.

The country said it would use more coal in the meantime, and is offering subsidies to taxi drivers and free bus rides to students. It’s also instituted a four-day work week for government employees.

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Japan

KAZUHIRO NOGI / Contributor / Getty Images

Japan began a record release of oil from its reserve last week as it tries to combat the oil crisis, according to The Guardian. It imports the vast majority of its oil, and its gasoline prices are currently at an all-time high.

The country is also looking to diversify its oil supply, turning to Alaskan oil production, which can be shipped to Japan more quickly than oil from the Middle East.

Japan also said it would relax restrictions on coal for one year to fill the gap and also restarted more than a dozen nuclear reactors, according to Reuters.

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Sri Lanka

ISHARA S. KODIKARA / Contributor / Getty Images

In order to save fuel, the island nation of Sri Lanka has declared every Wednesday a public holiday, ordering government offices and schools to close. The government has limited fuel residents can use, saying motorcycles can only get five liters a week, cars 15 liters, and buses 60 liters, according to the New York Times. Residents are only permitted to buy fuel on certain days depending on their license plate.