Monthly Briefing on the World Economic Situation and Prospects, No. 41

• Rising oil price complicates global recovery
• Agreement made for second rescue package to Greece
• Growth slowed in India and Brazil in 2011

During most of February, oil traded above $120 per barrel, reaching levels not seen since May 2011. The increase was triggered in?part by speculation about possible military action against the Iranian nuclear programme and the consequences of a scheduled ban?on oil imports from Iran to be imposed by the European Union. Stalled oil exports from the Syrian Arab Republic and South Sudan?have limited supply by several hundred thousand barrels a day, putting further upward pressure on prices.?Oil prices reached record levels in Europe. Measured in euros and British pounds, the price of Brent crude surpassed its peak of?2008 and is now 41 per cent above its level four years ago. Owing to a strong yen, the price of oil in Japan is still 7 per cent?below its January 2008 level. In the United States, West Texas Intermediate (WTI) crude is still traded at a discount of about $20 per?barrel compared to Brent due to insufficient storage capacity in Cushing, Oklahoma. Yet, as two thirds of oil is imported, American?consumers are also affected by the latest price spike. High oil prices could affect economic growth and inflation worldwide, but oil-importing developing countries with high fossil fuel-based energy intensity in production are particularly exposed to that risk.?

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