The global economy has shown few ill effects from rising oil prices, but the latest surge is starting to exact a toll on Asian economies.
In Thailand and Indonesia, where high fuel prices have sparked political protests, governments have slashed growth estimates for the year.
Other countries, including Japan and the Philippines, are employing energy conservation programs to blunt the effect of oil costs.
India faces the prospect of political instability from expected price hikes, and analysts say high energy costs could soon become a drag on China, which relies heavily on cheap fuel and other raw materials to prime its manufacturing growth.
Skyrocketing oil prices are "a heavy tax on most Asian economies," said William Overholt, director of Rand Corp.'s Center for Asia Pacific Policy.
Oil has doubled in price since the start of the year, ending last week at $66.13 a barrel. That's worrisome news for Asia Pacific economies, which rely on imports for 67% of their oil needs. Not only do they face unexpectedly high oil bills, but they fear that high energy costs, coupled with rising interest rates, will spook consumers in one of their largest export markets, the U.S.
As U.S. companies trim their energy consumption and consumers pare their spending, the slowdown is already being felt across the Pacific.
"Some of these countries are facing some real issues," said Kenneth Courtis, vice chairman of Goldman Sachs Inc. "Their trade numbers are going bad, inflation rates are moving up and people are grumbling" because governments are being forced to let energy prices rise.
The World Bank predicts that the global economy will slow to about 3% this year from 4% in 2004, but the effect on individual countries will vary widely.
Oil-rich nations in the Middle East and Central Asia will reap an extra $100 billion this year in oil exporting receipts, according to the International Monetary Fund. Similar good fortune will befall Latin American countries with vast oil reserves, such as Venezuela.
But oil importing countries in Eastern Europe and Africa will suffer, and the poor will be hit particularly hard because they depend heavily on kerosene for cooking and warmth, according to the World Bank.
Some economists warn that the global picture could darken if political tensions between the U.S. and Iran or Venezuela, or a natural disaster, lead to a sudden squeeze on oil supplies.
