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Would just like to add a couple of further points to ponder,

China was a net producer of oil only a few years ago and is now a net consumer. Japan as one of the largest economies in the world imports almost all of its oil. In the slash overheads at all costs economic environment predominent in the latter half of the 1990s transport costs are one area that remained relatively fixed, and as a result for many companies they are proportionally higher now than ever before. Stefan has pointed out the negative effect the prolonged pricerise of oil will have on the economy - I agree however believe the effects are currently being diluted somewhat by stocks with the highest exposure to the oil price having hedged against a rise, for example Qantas having hedged its fuel supplies. I think there is a concern in the general market that transport & petrochemical companies who rely heavily on oil will be forced to purchase supplies at much higher prices than they are currently hedged for and some that are struggling to profitablity will fall behind as time wears on - even if we see a retraction in the oil price.