courtesy StatoilHydro

The three-digit cost of oil is curbing globalization and could force oil companies to choose cheaper suppliers closer to home, according to a new study by CIBC World Markets.

“Globalization is reversible,” wrote Jeff Rubin, the parent bank’s chief economist. CIBC is a major oil-company bankroller.

The cost of moving steel and capital equipment, and not tariffs, is now seen as the largest impediment to supply chain exports in future, Rubin suggests in a new co-authored report for the bank. CIBC was one of the first to predict $100 oil and has pointed to $200 oil by 2012 (see Scandoil.com archive) as a likely scenario.

Now, Rubin’s report says, that for every dollar oil rises, supplier transport costs rise one percent. According to the new math, the cost of transport has eclipsed all trade-liberalization gains of the past 30 years.

According to the new CIBC report, the cost of shipping a 40-foot container from Shanghai to North America has jumped $5,000 since $20 oil eight years ago to $8,000.

ws@scandoil.com