Hoarding Is Driving Energy Prices Higher Everywhere
Wealthy nations are securing oil stocks, driving up global energy prices and causing shortages in vulnerable countries. The International Monetary Fund has warned countries against hoarding energy stocks or banning exports.
The conflict in the Middle East has severely constricted the global oil supply, with wealthy nations like China, Japan, Europe, and the US securing much of what's available. This has pushed prices higher everywhere, threatening shortages in less affluent nations in Asia, sub-Saharan Africa, and Latin America. Economists describe this as hoarding, with the market behaving like the 'law of the jungle' rather than an efficient allocating mechanism. As countries seek to protect their economies, they're affirming the impetus for others to lock up supply, creating a feedback loop of alarm and feverish buying. The International Monetary Fund, World Bank, and International Energy Agency have jointly warned countries against hoarding energy stocks or banning exports, urging them to 'do no harm'. Countries like China and Thailand have halted exports of jet fuel, causing shortages in importing countries like Vietnam, Myanmar, and Pakistan.
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