My Estimate of Crude Oil Price if Global Living Costs Were Equal

I estimate that crude oil could trade around $15.99 per barrel if the cost of living and purchasing power were equal across countries. My rough model groups oil consumption by income level: high-income countries at 43%, upper-middle-income countries at 26%, middle-income countries at 13%, and low-income countries at 18%. I assume each group would place different pressure on oil prices after equalisation. Using those assumptions, high-income countries would push prices down sharply, while low-income countries would keep prices closer to current levels. My weighted calculation produces an estimated crude price of about $15.99. This is only a simplified estimate. It could be lower if high-income countries experienced major declines in income and consumption during such an equalisation process.

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