Rising Oil Prices Shake the Global Economy: Decoding Country-Specific Risks and Investment Strategies via GDP, Foreign Exchange Reserves, and ARA

As of April 2026, oil prices remain high against the backdrop of the situation in the Middle East. So, what scars will this "high oil price" leave on the economies of various countries? And how should investors act?
We conducted a thorough country-by-country comparison based on three indicators: GDP sensitivity, foreign exchange reserves, and the IMF's ARA (Assessing Reserve Adequacy).

1. Impact of Rising Oil Prices on GDP

When oil prices rise by $10/barrel, how does each country's real GDP growth rate change?
The biggest point is that the "sign" is reversed between exporting and importing countries.

Table 1: Estimated Impact on GDP Growth Rate from a $10 Surge in Oil Prices

$$
\begin{array}{|l|c|c|l|} \hline \text{Country} & \text{GDP Impact (\%)} & \text{Export/Import} & \text{Main Reason} \\ \hline
\text{Iraq} & +3.0 & \text{Export} & \text{Oil dependency over 40\% of GDP} \\ \hline
\text{Saudi Arabia} & +1.5 & \text{Export} & \text{One of the world's largest oil export revenues} \\ \hline
\text{Norway} & +0.8 & \text{Export} & \text{Europe's only net exporter} \\ \hline
\text{Russia} & +0.6 & \text{Export} & \text{Energy surplus +9.1\% of GDP} \\ \hline
\text{USA} & +0.05 & \text{Export} & \text{Net exporter but large spillover to domestic demand} \\ \hline
\text{China} & -0.15 & \text{Import} & \text{Cushioned by coal substitution, etc.} \\ \hline
\text{India} & -0.2 & \text{Import} & \text{Coal substitution effect and foreign reserves as buffer} \\ \hline
\text{Japan} & -0.3 & \text{Import} & \text{Double whammy with yen depreciation} \\ \hline
\text{South Korea} & -0.4 & \text{Import} & \text{Energy deficit 5.7\% of GDP} \\ \hline
\text{Philippines} & -0.5 & \text{Import} & \text{Middle East dependency close to 100\%} \\ \hline
\text{Thailand} & -0.7 & \text{Import} & \text{Energy deficit 7.4\% of GDP (highest)} \\ \hline
\end{array}
$$

Source: Author's estimates based on IEA, Euronews/CountryETFTracker, and various IMF materials

2. Foreign Exchange Reserves and ARA—Measuring a Country's "Stamina"

Stamina cannot be measured by the "size" of foreign exchange reserves alone.
The ARA (Assessing Reserve Adequacy) metric proposed by the IMF calculates the "appropriate level" by taking a weighted average of the following four elements:

• Short-term external debt (immediate repayment obligation for external shocks)

• Broad money M2 (capital flight risk)

• Export revenue (risk of deteriorating terms of trade)

• Other external liabilities (portfolio outflows)

$$
\text{ARA Ratio} = \frac{\text{Actual Foreign Reserves}}{\text{ARA Metric (Appropriate Level)}} \times 100
$$

Table 2: Foreign Exchange Reserves and ARA Ratios of Major Countries (End of 2024)

$$
\begin{array}{|l|r|c|c|} \hline
\textbf{Country} & \textbf{FX Reserves ($B)} & \textbf{ARA Ratio (\%)} & \textbf{Judgment} \\ \hline
\text{China} & 3{,}280 & 103 & \text{Appropriate} \\
\text{Japan} & 1{,}260 & 145 & \text{Appropriate (near upper limit)} \\
\text{India} & 654 & 160 & \text{Sufficient} \\
\text{Saudi Arabia} & 450 & 200 & \text{Sufficient} \\
\text{South Korea} & 420 & 105 & \text{Appropriate (near lower limit)} \\
\text{Thailand} & 220 & 170 & \text{Sufficient} \\
\text{Indonesia} & 140 & 115 & \text{Appropriate} \\
\text{Philippines} & 100 & 170 & \text{Sufficient} \\
\text{Norway} & 90 & 200 & \text{Sufficient} \\
\text{Turkey} & 45 & 67 & \textbf{Insufficient} \\ \hline
\end{array}
$$

Source: Created based on IMF ARA Dataset, statranker.org (updated March 2025)

3. Energy Trade Balance: The Deep Divide Between Surplus and Deficit Countries

Table 3: Energy Trade Balance as a Percentage of GDP (2024)

$$
\begin{array}{|l|c|l|} \hline
\textbf{Country} & \textbf{Energy Balance/GDP (\%)} & \textbf{Notes} \\ \hline
\text{Iraq} & +40.8 & \text{Nearly half of national income is from oil} \\
\text{Norway} & +19.1 & \text{Europe's only net exporter} \\
\text{Russia} & +9.1 & \text{Monetization partially limited by sanctions} \\
\text{USA} & +0.3 & \text{Slight surplus due to shale revolution} \\ \hline
\text{Germany} & -1.5 & \text{Increased costs due to de-Russianization} \\
\text{Italy} & -2.0 & \text{Higher import costs via Mediterranean routes} \\
\text{India} & -2.5 & \text{Cushioned by coal substitution} \\
\text{Japan} & -3.0 & \text{High LNG dependency, high risk} \\
\text{Philippines} & -4.0 & \text{Nearly 100\% dependent on Middle East} \\
\text{South Korea} & -5.7 & \text{Extremely limited room for substitution} \\
\text{Thailand} & -7.4 & \textbf{Largest deficit country in Asia} \\ \hline
\end{array}
$$

Source: Euronews/CountryETFTracker, IEA Global Energy Review 2025

4. Strategic Petroleum Reserves in Asia: Durability Measured by Days of Inventory

84% of oil and LNG passing through the Strait of Hormuz is destined for Asia, and the shock of a blockade would be immeasurable. 84% How many days of inventory each country actually holds is the key to short-term resilience.

Table 4: Strategic Petroleum Reserve Days for Major Asian Countries (2025)

$$
\begin{array}{|l|c|c|} \hline
\text{Country} & \text{Days of Inventory (Domestic Demand Equivalent)} & \text{Ratio to IEA 90-Day Standard} \\ \hline
\text{Japan} & 254 \text{ days} & \text{Approx. 2.8x (Sufficient)} \\ \hline
\text{South Korea} & 210 \text{ days} & \text{Approx. 2.3x (Sufficient)} \\ \hline
\text{India} & 74 \text{ days} & \text{Below standard} \\ \hline
\text{Philippines} & 60 \text{ days} & \text{Below standard} \\ \hline
\text{Indonesia} & 25 \text{ days} & \mathbf{Extremely dangerous} \\ \hline
\end{array}
$$

Source: ING Think "Oil shock for Asia" (March 2026), Atlantic Council (March 2026)

5. Investment Strategy Matrix

A scatter plot with "Energy Trade Balance as a % of GDP" on the horizontal axis and "ARA Ratio" on the vertical axis visualizes each country's position and recommended strategy.

How to read:

• Top right (Energy surplus × Abundant FX) → BUY

• Bottom left (Energy deficit × Insufficient FX) → AVOID / UNDERWEIGHT

• ARA less than 100% (below red line) → High risk of currency crisis

6. Summary of Country-Specific Investment Strategies

Table 5: Investment Stance by Country During Periods of High Oil Prices

$$
\begin{array}{|l|c|l|l|} \hline
\textbf{Country/Region} & \textbf{Rating} & \textbf{Focus Assets} & \textbf{Rationale} \\ \hline
\text{Saudi/Gulf Oil Producers} & \text{★ BUY} & \text{TADAWUL, Aramco} & \text{Direct GDP benefit, fiscal surplus} \\ \hline
\text{Norway} & \text{★ BUY} & \text{Oslo stocks, energy stocks} & \text{Europe's only net exporter} \\ \hline
\text{India (Domestic/IT)} & \text{★ BUY} & \text{NIFTY IT, domestic sectors} & \text{ARA 160\%, coal substitution} \\ \hline
\text{US Energy} & \text{■ NEUTRAL} & \text{XLE ETF, upstream stocks} & \text{Surplus but headwinds for domestic demand} \\ \hline
\text{China (EV/Renewables)} & \text{■ NEUTRAL} & \text{EV stocks, solar-related} & \text{Selective for non-oil sectors} \\ \hline
\text{Japan (Trading/Exports)} & \text{▲ HEDGE} & \text{General trading companies (Mitsubishi, Itochu)} & \text{Offset high oil prices via trading firms} \\ \hline
\text{South Korea} & \text{▼ UW} & \text{Reduce KOSPI overall} & \text{Energy deficit 5.7\%} \\ \hline
\text{Thailand/Philippines} & \text{▼ UW} & \text{Caution on both currency and stocks} & \text{Largest energy deficits} \\ \hline
\text{Turkey} & \text{✕ AVOID} & \text{Avoid TRY bonds and stocks} & \text{ARA 67\%, risk structure} \\ \hline
\end{array}
$$

Portfolio Allocation Concept (During High Oil Price Periods)

$$
\begin{array}{|l|c|l|} \hline
\textbf{Asset Class} & \textbf{Allocation (\%)} & \textbf{Examples} \\ \hline
\text{Oil-Producing Country Stocks} & 25 & \text{Saudi, Norway, Iraq ETFs} \\ \hline
\text{Global Energy Stocks} & 20 & \text{XLE, Shell, TotalEnergies} \\ \hline
\text{India/Emerging Domestic Demand Stocks} & 15 & \text{NIFTY, Vietnam Domestic Demand} \\ \hline
\text{US Energy ETFs} & 15 & \text{XLE, XOP} \\ \hline
\text{Gold/Commodities} & 10 & \text{GLD, Commodity Indices} \\ \hline
\text{Defensive Bonds} & 10 & \text{Developed Market Short-Term Gov Bonds} \\ \hline
\text{Cash} & 5 & \text{USD / JPY MMF} \\ \hline
\end{array}
$$

7. Summary

The impact of high oil prices varies significantly depending on the combination of a country's 'energy trade position' and its 'foreign exchange reserve strength (ARA)'.

$$
\begin{array}{|l|l|l|} \hline
\textbf{Factor} & \textbf{Winners (Resilient Countries)} & \textbf{Losers (Vulnerable Countries)} \\ \hline
\text{Energy Balance} & \text{Iraq, Norway, Saudi} & \text{Thailand, South Korea, Philippines} \\ \hline
\text{ARA Strength (FX Reserves)} & \text{India, Thailand, Norway} & \text{Turkey (67\%)} \\ \hline
\text{Alternative Energy Means} & \text{China, India (Coal/Renewables)} & \text{South Korea, Japan (Limited Alternatives)} \\ \hline
\text{Inventory Durability (Stockpiles)} & \text{Japan (254 days), South Korea (210 days)} & \text{Indonesia (25 days)} \\ \hline
\end{array}
$$

Message to Investors: In a high oil price environment, a strategy centered on oil-producing countries and energy stocks, while selectively incorporating resilient emerging markets (India), is effective.
On the other hand, the key is to reduce exposure to countries with insufficient ARA (Turkey) and high energy deficit countries (Thailand, South Korea), and to add inflation hedges through gold and commodities.

8. Fact Check & References

Fact Check Results

$$
\begin{array}{|l|l|l|} \hline
\text{Main Claim} & \text{Verification Result} & \text{Source} \\ \hline
\text{Thailand's Energy Deficit: -7.4\% of GDP} & \text{✓ Confirmed} & \text{Euronews / CountryETFTracker (2026/3)} \\ \hline
\text{Japan's Strategic Petroleum Reserve: 254 days} & \text{✓ Confirmed} & \text{ING Think / Atlantic Council (2026/3)} \\ \hline
\text{Turkey's ARA Ratio: approx. 67\%} & \text{✓ Confirmed} & \text{CFR / Latest IMF Report} \\ \hline
\text{India's FX Reserves: $654 billion} & \text{✓ Confirmed} & \text{statranker.org (2026/3)} \\ \hline
\text{84\% of oil via Hormuz goes to Asia} & \text{✓ Confirmed} & \text{Zero Carbon Analytics (2026/2)} \\ \hline
\text{ARA Appropriate Range: 100-150\%} & \text{✓ Confirmed} & \text{IMF BIS Papers No.104 / ARA Dataset} \\ \hline
\end{array}
$$

References

1. IEA Global Energy Review 2025 — Oil
   https://www.iea.org/reports/global-energy-review-2025/oil

2. Euronews "Iran oil shock splits the world" (March 2026)
   https://www.euronews.com/business/2026/03/12/iran-oil-shock-splits-the-world-as-exporters-pocket-windfall-and-importers-buckle

3. ING Think "Oil shock for Asia" (March 2026)
   https://think.ing.com/articles/oil-shock-for-asia-identifying-the-first-pressure-points/

4. Atlantic Council "What a Middle East oil and LNG crisis means for China and East Asia" (March 2026)
   https://www.atlanticcouncil.org/dispatches/what-a-middle-east-oil-and-lng-crisis-means-for-china-and-east-asia/

5. Zero Carbon Analytics "Asian countries most at risk from oil and gas supply disruptions" (February 2026)
   https://zerocarbon-analytics.org/insights/briefings/asian-countries-most-at-risk-from-oil-and-gas-supply-disruptions-in-strait-of-hormuz/

6. IMF ARA Dataset (October 2025)
   https://www.imf.org/external/datamapper/datasets/ARA

7. IMF ESR 2025 Chapter 3 — Individual Economy Assessments
   https://www.imf.org/-/media/files/publications/esr/2025/english/ch3.pdf

8. BIS Papers No.104 "The size of foreign exchange reserves"
   https://www.bis.org/publ/bppdf/bispap104a_rh.pdf

9. statranker.org "Countries by Foreign Exchange Reserves 2025" (March 2026)
   https://statranker.org/economy/countries-by-foreign-exchange-reserves-2025/

10. ScienceDirect "Oil prices impact on GDP — time-varying threshold model" (May 2024)
    https://www.sciencedirect.com/science/article/abs/pii/S0301421524001824

11. IMF ESR 2024 Chapter 2 — Commodity Shocks
    https://www.imf.org/en/-/media/files/publications/esr/2024/english/ch2.pdf