This paper examines the levels of andchanges in vulnerability to oil price increases between 1996and 2006 in 161 countries for which data are available.Vulnerability defined here as the ratio of the value of netoil imports to gross domestic product (GDP) rises if oilconsumption increases and oil production decreases per unitof GDP. By comparing the level of vulnerability of differenteconomies at a point in time, those that are particularlyvulnerable to oil price increases can be highlighted. Thisenables consideration of the factors (variables) that helpdetermine the magnitude of vulnerability. Over timeeconomies change in ways that may make them more vulnerableto oil price increases or less so, and the change invulnerability will be related to changes in the underlyingvariables. The analysis this paper uses is a starting pointfor linking these factors. The study also examined changesin vulnerability by subdividing the period under review intotwo sub-periods, 1996-2001 and 2001-6. The oil priceincrease during the first sub-period was small, andcorrespondingly the change in vulnerability was alsolimited. The change in vulnerability was greater during thesecond sub-period, which saw a 2.5-fold price increase innominal U.S. dollars. This paper highlights the role ofchanges in the oil share of energy and of energy intensity,both of which can be influenced by government policies, andalso by oil production, which, even though it is largely afunction of geology, can also be affected by acountry's upstream fiscal, contractual, and regulatory frameworks.
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