Crude Costs

Russia currently produces 10 million/bbl of oil/day, about 10% of world production, making it the world’s third largest producer and the second largest exporter. Fear of those supplies being disrupted is causing oil prices to gyrate. Roughly speaking, every $10 rise in the price of a barrel of oil temporarily raises inflation by about two-tenths of a percent and reduces GDP by about one-tenth of a percentage point.

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