With crude oil at $100 a barrel, there is going to be a massive transfer of global financial wealth from oil consuming countries to oil exporters. Some of these windfalls will be absorbed by the economies of the oil producers, but a far larger amount will be invested outside them. Indeed, a petrodollar tsunami is coming, with significant consequences for global financial markets.

How big are petrodollars? They are big and getting bigger with the rise of oil prices. We can look at this in terms of the financial worth of the stocks of proven oil reserves  underground, or in terms of flows – ie the value of the annual oil exports. At $100 a barrel, the total proven reserves of the oil exporting countries is about $104,000bn – equivalent to the combined total value of publicly-traded equities and bonds in the world. About $48,000bn of this belongs to the Gulf Co-operation Council member countries – which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The rest of Opec owns another $44,000bn, while non-Opec countries (Canada, Norway, Mexico and Russia) own some $12,000bn worth of oil reserves.