The Global Impact of High Oil Prices

0:00With March Madness getting underway, coaches are pushing their players to the limits. But an investigation finds that in some instances, tough coaching can go too far. She would call us idiots, stupid, worthless, low of the low. On the Sunday story, coaches accused of emotional abuse and the players who pushed back. The Sunday story from the Up First podcast. Listen now on the NPR app. Today on State of the World, the global impact of high oil prices.

0:33You're listening to State of the World from NPR. We bring you the day's most vital international stories, up close where they're happening. I'm Greg Dixon. Ever since the U.S. and Israel launched a war on Iran, oil prices have been on a roller coaster, but overall have been trending higher. An increase in the price of oil has worldwide consequences, with winners and losers. To get a snapshot of where things stand, we're going to hear from three reporters around the world. In Taiwan, in Germany, and we start in Russia with NPR's Charles Maines. In Moscow, initial Kremlin outrage over the U.S.-Israeli attacks on Iran and assassination of the country's supreme leader has given way to political triangulation, says Vladislav Inazemsev, a Russian economist and government critic now based in the U.S.

1:20It was one of the very few cases when the death of your close ally was immediately transformed into a source of some tangible gains. The Kremlin has condemned U.S.-Israeli actions as a violation of international law, but moved quickly to leverage the crisis, particularly when it comes to energy. Meeting with top oil and gas officials in Moscow, Russian President Vladimir Putin instructed them to use the new price reality in hydrocarbons to recoup losses from Western sanctions. Meanwhile, Kremlin aide Yuriushikov said Putin offered a number of considerations towards ending the conflict in a phone call with President Trump last week.

2:03The U.S. has since issued a temporary waiver on sanctions on some Russian oil exports, first to India and now to the rest of the world. a reversal in U.S. policy that aids Russia's war chest for Ukraine, say critics. Yet the windfall for government coffers has been welcomed in Moscow, where the economic forecast and mood were otherwise grim, says the economist in Azemtsev. Yes, it can provide a kind of lifeline for the Russian finances, but what is even more important, it changes the attitude of the Russian elites and leads to what is going on. On Friday, Kremlin spokesman Dmitry Peskov acknowledged U.S.

2:39and Russian energy interests were aligned for now, but warned long-term global market stability depended on continued access to Russian energy. It's the latest sign that as the crisis in Iran deepens, Moscow is betting on future sanctions relief from the U.S. and Russia's return as an essential energy exporter. I'm Rob Schmitz in Berlin, the capital of Europe's largest economy, an economy that has had a rollercoaster week. Germany's largest employer, automaker Volkswagen, announced this week it plans to cut 50 ,000 jobs inside the country because its profits have been cut in half in the past year.

3:13Also this week, the country's largest defense contractor, Ryan Mattal, announced its sales are expected to grow by nearly half this year in that it's selling off its automotive parts division to focus on making more weapons. Now, neither of these announcements have anything to do with the rising cost of oil due to the war in Iran. But they're both indicators that Europe's largest economy is in flux, and spiking energy prices are complicating matters. Germany's Federal Economy Minister Katharina Reiche warned the nation's gas stations that the government would fight price gouging by only allowing them to raise the price of gas once per day.

3:53The price of gasoline in this car-loving nation has increased by more than 20 percent since the war began, And Germans are now paying nearly$9 per gallon at the pump. But Claudia Kempfert, economist at the German Institute for Economic Research, told national broadcaster ARD that the country's new price-gouging law is missing the bigger point. Rising prices at the pump are a wake-up call, said Kempfert, about our excessive dependence on fossil fuels. But Germany is moving away from fossil fuels, largely spurred by the energy crisis following Russia's invasion of Ukraine. Over the past five years, the country's renewable energy share went up more than 10 percent.

4:33More than 55 percent of Germany's electricity is now generated by renewables. A big help in times like these when the global price of oil seems to keep rising. I'm Ashish Valentine in Taipei. Here in Asia, the undisputed leader in renewable energy is China. More than half of all new vehicles sold there are EVs or hybrids. And less than 5 % of Chinese electricity is generated from oil and gas, although quite a bit more comes from domestically sourced coal. That sets it up reasonably well for the fuel shocks caused by the Iran war, says Dan Wong, an analyst at Eurasia Group, which helps businesses determine political risk.

5:11China's massive investment in green technology over the past 20 years is paying off really well. So the Chinese economy doesn't depend on oil and gas. in a similar level as the other Asian economies. Combined with months of fuel reserves, she says, that means the average Chinese consumer hasn't yet noticed a hike at the gas pump. More concerning for China is what to do if the war goes on for longer than a few months. It's banned refined fuel exports to help preserve local supply. Over the next few years, Wang says China plans to even further insulate its energy supply from American policy decisions.

5:50China has been developing new pipelines, investing heavily to connect with Russia and diversifying the sources of oil and gas to Central Asia. Here in Taiwan, which manufactures the vast majority of the world's high-tech logic chips, the semiconductor industry is heavily reliant on power generated from liquefied natural gas. In normal times, a full third of Taiwan's LNG imports comes from Qatar. But these aren't normal times. Taiwan's economy minister Kang Ming-xin told reporters the island has secured enough gas shipments to meet demand through April. But in the event the conflict lasts longer, Taiwan and other Asian nations are seeking alternative suppliers such as the U.S.

6:34and Australia. That was Ashish Valentine in Taipei. We also heard from Rob Schmitz in Berlin and Charles Mainz in Moscow.

6:46that's the state of the world from npr thanks for listening with march madness getting underway coaches are pushing their players to the limits but an investigation finds that in some instances tough coaching can go too far she would call us idiots stupid worthless low of the low on the Sunday story coaches accused of emotional abuse and the players who pushed back the Sunday story from the up first podcast listen now on the NPR app