RD must seek US$63.4 million more for each dollar that oil rises and is US$35.65 above

It is estimated that for every US$1 increase in the reference price of oil, the Dominican Republic’s oil bill rises by about US$63.4 million, according to the country’s oil consumption.

For the General State Budget of the current year, an average price of US$47.80 was estimated for a barrel of oil. However, Tuesday’s closing prices exceeded US$83.45.

This means that the current average price of oil is US$35.65 dollars above what was estimated in the Budget, which represents about US$2,260 million more.

Therefore, increases in the average price of crude oil directly affect the country’s current account deficit, due to the additional resources that the Government must seek to cover this bill.

The International Energy Agency (IEA) has proposed the largest release of oil reserves in its history to reduce crude oil prices, which have skyrocketed after the United States and Israel’s attack on Iran and the difficulties in crossing the Strait of Hormuz, through which a fifth of the world’s oil and gas circulates.

According to a publication ‘The Wall Street Journal’ (WSJ) citing sources familiar with the proposal, the release of oil reserves would exceed the 182 million barrels of oil that the IEA member countries put on the market on two occasions in 2022, when Russia invaded Ukraine.