The sudden production cut by OPEC and its allies sent oil prices soaring – and analysts say big oil importers like India, Japan and South Korea will feel the most pain if prices reach $100 a barrel, as some have predicted.

On Sunday, OPEC+ announced a production cut of 1.16 million barrels per day, in a move that oil markets were not expecting.

“It’s a tax on every oil-importing economy,” said Pavel Molchanov, managing director of the private investment bank Raymond James.

“It is not the United States that will feel the most pain from $100 oil, it will be the countries that do not have domestic petroleum resources: Japan, India, Germany, France…to name a few,” said Molchanov.

Voluntary cuts by the oil cartel’s member states are set to begin in May and last until the end of 2023. Saudi Arabia and Russia will each Reducing oil production by 500,000 barrels per day Until the end of this year, while other OPEC members such as Kuwait, Oman, Iraq, Algeria and Kazakhstan also cut production.

Brent crude futures were last trading up 0.57% at $85.41 a barrel, while US Brent crude futures were up 0.5% at $81.11 a barrel.

“The regions most affected by the reduction in oil supply and the associated jump in crude prices are those that are highly dependent on imports and have a high share of fossil fuels in their primary energy systems,” said Henning Glustein, director of Eurasia Group.

“Although they still benefit from the discount for Russian gas, they are already being hurt by higher coal and gas prices,” Gloystein said.

“If oil rises further, even discounted Russian crude will start to hurt India’s growth.”

Japan

Oil is the most important source of energy in Japan, and account for about 40% of the total power supply.

“With no noticeable domestic production, Japan is highly dependent on crude oil imports, with 80% to 90% coming from the Middle East region,” International Energy Agency He said.

South Korea

Likewise for South Korea, oil is making up Most of its energy needsAccording to the independent research firm Enerdata.

“South Korea and Italy are more than 75% dependent on imported oil,” Molchanov noted.

According to Gloystein, Europe and China are “extremely exposed”.

However, he added, China’s exposure was slightly lower due to domestic oil production, while Europe as a whole relies primarily on nuclear power, coal and natural gas rather than fossil fuels in its primary energy mix.

Molchanov said that some emerging markets that “do not have the foreign currency capacity to support these fuel imports” will be negatively affected by the $100 price point. He described Argentina, Turkey, South Africa and Pakistan as potential economies that would be affected.

He said Sri Lanka, which does not produce oil domestically and is 100% dependent on imports, is also vulnerable to a harder hit.

“The countries with the least foreign currency and imports are the most affected because oil is priced in US dollars,” said Amrita Sen, founder of Energy Aspects, adding that the cost of imports would rise further if the US currency appreciated.

However, while $100 a barrel may be on the horizon, the higher price point may not be around for long, Molchanov said, adding that it will not be the “permanent plateau.”

“In the long run, prices could be more in line with where we are today,” he said — in the range of $80 to $90 or so.

“Once the price of crude oil reaches $100 and stays there for a little while, that incentivizes producers to ramp up production again,” Gloystein said.