Greasing the wheel: Oil’s role in the global crisis
Between January 2002 and August 2008, the nominal oil price rose from $19.7 to $133.4 a barrel. This led to a large increase in oil revenues for oil exporters and a deterioration of the current account for oil importers. Between 2002 and 2006, net capital outflows from oil exporters grew by 348%, becoming the largest global source of net capital outflows in 2006 (McKinsey 2007).
Capital outflows from oil exporters therefore played an important role in the global liquidity glut during the build-up to the US subprime crisis.
May 24, 2012