When oil prices rise, it can have both positive and negative effects on the economy. Here are some possible consequences of higher oil prices:

Positive effects:

• Job creation and investment in the oil industry can increase as it becomes economically viable for oil companies to exploit higher-cost shale oil deposits.
• Countries that are net exporters of oil, such as Russia, can benefit from higher oil prices as it feeds their war chest.

Negative effects:

• Inflation can increase as oil prices directly affect the prices of goods and services that require oil for production and transportation.
• Economic growth can decrease as higher oil prices can reduce consumer spending power and increase production and transport costs.
• The banking and investment sectors can suffer when oil prices drop, as companies dependent on drilling and service may go out of business.

Central banks may respond to rising oil prices by hiking interest rates further or keeping them higher for longer, which can have further implications on the economy.

Its important to note that the impact of rising oil prices on the economy can vary depending on factors such as the level of economic growth, the balance of trade, and the degree of dependence on oil imports.