Although Japan’s crisis because of its triple tragedy initially led to a drop in oil prices, it ultimately will mean higher consumer prices in the United States, many economists say, according to Yahoo’s Tech Ticker.
That includes energy prices. Even if Japanese use of crude oil declines, its demand for gasoline and other refined oil products is expected to rise because of the damage sustained by the nation's refineries.
"That is going to drive up the market price for everything from diesel and gasoline to jet fuel," James DiGeorgia, editor of the Gold & Energy Advisor, told The Los Angeles Times.
The price of crude can be expected to rise, too, because the shutdown of some of its nuclear power sites means Japan will need more supplies of fossil fuels, such as oil.
The crisis could mean bad news for Americans who buy Japanese cars. Prices could rise after Toyota, Honda, and Nissan Motors were forced to close plants because of the earthquake and tsunami. But supply shouldn’t be affected too much, because of the bevy of plants those companies have overseas.
The price of memory chips and liquid crystal displays that go into consumer electronics products made by the likes of Sony, Toshiba, and Hitachi have surged since the earthquake, The Wall Street Journal reports. Although no shortages have been reported yet, fears are rampant, and Sony has halted production at six factories in northern Japan.
In addition, the yen has strengthened against the dollar since the earthquake, and the greenback already was slumping amid the Federal Reserve’s massive easing and the exploding budget deficit.
Meanwhile, star Yale economist Robert Shiller told CNBC that Japan’s crisis could cause a major drop by world stock markets. “There is a risk of high volatility in the markets and even important drops in the markets,” he said.
“I would make a parallel to the last big earthquake in Kobe, Japan, in 1995. There was a huge worldwide stock market drop a full week after that earthquake. That’s the kind of thing we have to worry about now.”
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