The current crude futures price is $108. From the Fed’s modelling, we have seen an increase in oil prices of about 67%.
Now, the numbers below are from this Fed DSGE modelling exercise, and it’s going to depend on how long this shock lasts, but let’s assume it doesn’t appreciably decline too fast.
Inflation is going to be 1 percentage point higher for 5 quarters. That’s inflation going from 2.4 to 3.4%. So long as the shock is relatively short lived, these inflation effects go away.
Real GDP is half a percentage point lower for about 2.5 years, with it remaining 0.4 pp depressed permanently. This would make the GDP read in Q4 go from 1.7 to 1.2/1.3.
After about 2.5 years, real wages are 0.67 pp lower permanently. We’ve celebrated low income real wage growth of about 2 pp per year (2019 to 2025), so this is a real kick.
So, while oil price shocks HAVE become less bad since stagflation, they are still very bad, with significant impacts lasting at least a year.
Hey now, that might be true but the bigger issue is we have a compromised government and billionaires furthering the agenda of right wing think tanks that blatantly lie to get elected (as felons).
True but years of screwing up public education and spreading disinformation (especially most recently via social media) made the recipe for this possibility.
Ha he ain't even done. Inflation in the US is not a good story for him either, he will need to distract the population there with more tariffs and a war in Cuba.
Oh, cry me a river. The US got massive oil production, so for you guys costs will at least partially be offset. Rest of the world though? Screwed. Massievly. Especially as food prices are correlated with energy products.
Europe, Africa, Asia? They all will pay why you guys will complain that things are a bit worse and how much you sacrifice because of this war.
Ok, I didn't remmeber, most people on this sub can't do basic thinking beside "Trump bad"...
What happens when you shut production of the good in one place, especially when demand is inelastic? Relative value of production of other producers increase.
So in case of the current war: value of the US oil increased. What does it mean? Terms of trade for the US improve. We can see it in appreciation of dollar.
That has few important results for the US. First: massive increase in income by the US oil corporations boosting tax revenues. Second: for rest of population: costs will be offset partially by cheaper imports. Third: potential increased imports will add to tax revenues due to tariffs.
Americans at large? Will pay insignificant part of costs of this war, and only because the US got not much of social state. Because the US may even profit on this war. Rest of the world though, aside of like Canada, russia, Kazakhstan, Nigeria etc.? Yeah...
If this will be prolonged war and crisis, there will be famine in Africa. And a bit of worse quality of life for Americans. Which will be resolved with stimuli check or something like that.
No. I think that their cost will be offset. We just got same thing 4 years ago. The US by any indicator was aproaching recession in 2022. And it didn't happend.
But what happend was war in Ukraine. Energy prices spiked, the US got a bit worse inflation than it would probably get regardless as high increase of money supply from 2020 was reaching real economy. But that's all.
The US economy was growing despite all indicator saying it shouldn't. But capital outflow from Europe, increased income from selling energy goods etc meant that any costs of economic problems US could have were offset hitting in that time the EU instead.
Most US citizens will get poorer... Slightly. But US at large? It might see some decline, but limited. And there's even chance it will actually gain net profit in short term. Because cost will be paid by the rest of the world instead.
Thanks for your layman subjective opinion. My comment also had nothing to do with Trump. Are you one of his cucked supporters that worship him? Your personal opinion is pretty much illegitimate, especially if you’re just a high school level grad.
>you guys will complain that things are a bit worse and how much you sacrifice because of this war.
You. Because I'm not from the US.
And simple question: which part of what I said is false?
Does US have massive oil (also: natural gas etc) production? Yes. Does its relative value spiked due to war? Also yes. Does it improve US terms of trade? Yes. Should it increase tax revenue? Yes. Should it make imports relatievly cheaper for the US? Yes. Should these relatievly cheaper imports again increase tax revenue? Yes.
Will US profit on the war? Relatieve to pretty much all other countries aside selected few (e.g. russia, Canada, Norway) definietly, quite probably even just "yes" in a short term.
With this level of shock: it's all speculation. Last time we had something comparable was at least 20 years ago (Iraq) and probably rather 50 years ago (OPEC).
Who said non-expert?
You are slippin' man. You can't refute any point so you try to you use rather poorly ad persona argument.
US could produce the oil as much as they want, yet they cannot say their companies to sell the fuel at the "socialistic" prices. They are going to sell it at the global prices to ensure the companies aren't going to lose the money due to the domestic market.
And if the oil would hit 200 they are going to hit everywhere, including the US themselves. And if the fuel is going to be sold at 200 to the domestic oil refineries, then the domestic fuel prices are going to be corrected accordingly.
>US President Donald Trump’s decision not to replenish the country’s Strategic Petroleum Reserve (SPR), which had been heavily drawn down by his predecessor Joe Biden, has left American consumers vulnerable to an oil price shock following US and Israeli attacks on Iran, The Financial Times reported citing analysts.
>According to the report, the reserve — created in 1974 after the 1973 Arab oil embargo — remains well below capacity after Biden released large volumes of crude to tame fuel prices following Russia’s full-scale invasion of Ukraine in 2022.
>The SPR currently holds about 415 million barrels of oil, enough to cover roughly 20 days of US consumption, far below its 714 million-barrel capacity.
Time to make nice with Canada and Mexico to increase output. Start converting that corn. The whole thing is a mess. Groceries will go up again yet with the price of transport up.
Don’t forget anything in a piece of plastic is tied to the oil market, amongst many other things. Oil has a massive impact on olefin based chemical markets.
I mean, every piece of food you buy is basically wrapped in plastic somewhere or multiple times.
Hey man, at least congress stuck its neck out and said that we needed to reduce the size of the reserve. Not that the presidents couldn't have just ignored congress congressional mandate
Oil companies are private entities and sell to the highest bidder. As long as global prices are high US prices will be high. Unless we go full socialism and take government control of the oil industry Venezuela style.
Ohh no trust me, as an American… it’s going to hit the U.S.
A. Do you think US oligarchs will care and use oil strategically for the country? Lol, there 100% going to seek it on the international market
B. Even without that, this is going to hit a ton of other resources the U.S. imports
C. The Middle East is also a critical supplier of sulfur and fertilizer so that’s also getting hit
D. Super is used in copper and cobalt production so that’s also getting hit
E. Also in this Administrations brilliance… they…
Failed to fill up the strategic oil reserve…
Corpus Christi is a key oil refiner and port and it’s about to run out of water an shut down….
My fellow citizens are about to find out what they voted for
That’s just the U.S. though. The impacts are going to be much harsher in areas more dependent on Middle East supply as they might experience outright shortages with a 20% drop in oil availability
And let us not forget the regional effects will be heterogeneous. Oil producing areas and maybe refining areas could benefit or have the impact ameloriated; but thag means the other places are getting the worse side of the feds model.
Can't wait for the prices to keep rising till 2028, then suddenly they'll start dropping just before election season to critical acclaim of Trump's handling of the gas crisis caused by Hillary Clinton.
So does this mean we’re likely to see stagflation? I’ve already noticed a drop in traffic around my town and bars are almost empty at times when it used to be booming. People are already cutting back on local travel it seems.
I bought a truck on the last day of February, funny timing i know. This was in Phoenix at a relatively large domestic brand. I was one of three people buying a car and even stepped foot in there the whole time from 8am-1am. They were desperate to move cars, and the people just weren’t there.
There was solid stagflation risk anyway with the way Trump has meddled with the economy via tariffs and other risky behavior to let the problem smolder.
The WSJ had a good article today on how though this is a scenario that could get really bad really quick, the 70’s are less insightful today than in the past.
I almost rear ended a car yesterday that was part of the line until a small gas station on a 6 lane road. Price was $3.16 cash. My neighborhood was $3.59 while that area tends to be higher so I definitely understand the line but dang. so unsafe due to being on such a huge road.
This is one of those moments where I'm happy I drive an EV and I hope we can finally find the motivation to step up efforts to become lose fossil dependency in the EU
I have solar panels though, and I have the Chargepass charging card with a 4€ per month subscription. At Ionity chargers that means I pay 0,39€ per kwh 0,29€ even when driving in France.
Also at home I have a fixed price contract for electricity.
That's good. I really hope solar panels and EV proliferate. But right now, the world is still dependent on oil so there will be secondary impact even on solar panels and charging.
Yes, opex will increase. The trucks, ships, and cranes used to transport people, equipment, or parts for maintenance. The cost of materials to maintain the plants, panels, or turbines.
In the EU, most electric markets use the marginal pricing system. In layman's terms, the price of energy depends on the price of the most expensive energy source. (This is a huge simplification)
I’m concerned about gas prices. I never got to a place where I needed or wanted an EV. I work from home, but the other two cars in my home have extremely short commutes to work or school. Under 2 miles one way, each.
I’m mostly concerned about the job losses to come. As I am WFH, I’m very expendable. Replacement income in my region is very hard to come by, within a job market that is terminally frozen and has been for 2 plus years. I carry zero debt at all, but I do rent.
I’ve prepared best I can. Saved diligently, but have notably kept much of it out of risk-based investing. More or less expecting our economy to fully go off the rails at some point.
I just dread it all. In my 27 year working career, this will be about the 5th time on my watch that great uncertainty was introduced. I’ve lost work 4 of those times.
Right? But sadly the US doesn't have walkable towns.
I grew up less than 2 miles from every school I attended. But there are no sidewalks or bike paths connecting my neighborhood to any schools. It's like that for grocery stores, libraries, everywhere.
I can walk or bike 2 miles north or south. East and west are not doable because of how the roads and highway are setup.
If I wanted to go 2 miles east, I'd have to go about 4.5 miles to get there. Safety is average. If I wanted to go 2 miles west, I'd probably have to go 5 miles. It's about as unsafe as I could get without running across a highway.
I used to live 5 miles from my job (apartment home to industrial park job) until I moved further away. I biked every day but it was dangerous, there was no bike lane and no sidewalk. No way to bike was good for me or for the cars - if I used the whole lane (as is recommended), cars would line up behind me and lay on their horn until they could pass. If I kept to the right of the lane, cars would get within 2-3 inches of me usually going 45 in the 35. Keep in mind in the USA (especially in the south where I am at) most people keep handguns in their car and cyclists getting shot at by car drivers in a road rage is not uncommon.
If I took public transit, it would take me 1.5 hours (at minimum) to travel those 5 miles, since there existed no direct public transit route, including a 1 mile walk to the nearest bus stop from my apartment, two bus transfers, and a 1 mile walk to my job from the last stop.
No carpooling option since none of my coworkers lived anywhere close to me.
So, I biked every day, and just dealt with the very real, very increased safety risk, because I didn't want to waste money on gas. I was the only person I ever saw on a bike going to work in my area.
Have you ever lived in an area that is not bike or pedestrian friendly? People don't always live or work in the ideal situation and have to make the best with what they have. I would love for everywhere to have 3ft+ wide sidewalks & dual direction bike lanes but that isn't reality in the huge majority of the USA.
I'm not even sure marked bike lanes add much safety without a structural barrier. We have well marked bike lanes and you still read about multiple bicyclists being killed by motorists every year. Never heard of anyone getting shot so at least that's something. Honestly I feel safer mt biking than road biking even though I'm sure statistically that is wrong. But at least you have some control compared to being defenseless against a bad driver.
Reminder that the Zionist state has its arm shoved up Drumpf’s ass to the shoulder and is working him like a muppet to do their dirty work against Iran. Think about this sham, for sale to the highest bidder shitbag we elected and how far you’re willing to let this go, America.
Well thafs gonna be 6 dollars a gallon average in the US by Monday and peak petroleum if they continue 8n the rocket ship they are on will be 10 to 12 dollars a gallon on 200 dollar a barrel oil by end March unless something changes
Well you have to consider the refinery paradox the US imports heavy sour and exports light sweet fuel because our refineries were set up to process the heavy sour petroleum. So while its true that the US is a net exporter of petroleum we are exporting the oil we can't refine and importing the oil we can.
So we import around 8.5 million barrels of petroleum a day and from the middle east stuff we can refine which is about 1/10 of our imports and about 6.5 percent or so of our total demand. Even if we wanted to simply refine more of our domestic oil its 3 to 5 years for the refining equipment to change in order to process that light sweet crude we have.
But there are tons of refineries set up to process the middle eastern crude and now suddenly its off the market and everyone is basically bidding up the remaining supplies of existing equivalent. Thats gonna continue until the supply shortage is addressed via demand destruction from higher prices or the middle east comes back online.
But it gets worse in the US because we suddenly have a 6.5 percent shortage of processed petroleum on the market which means that refineries can now raise prices additionally to take advantage of that secondary supply shortage.
Now the last time petroleum prices broke 110 dollars a barrel gas prices stayed above 5 dollars a gallon but this time the US is taking a harder hit because like I said we have refineries with nothing to refine so the price peak will be worse at the pump because the middle east impacts US fuel markets harder than Russia did.
I admittedly know very little about the economy. But assuming oil prices work like bitcoin and meme-stocks, get your tendies ready boys. We're going to the moon tomorrow 📈🚀
===> Oil prices soar past $100 a barrel as war escalates in Iran
.
One wonders, if all this is directed against Africa.
Are Trump or USA attempting to sabotage rapid industrialization and development in Africa,
===> first through trade war with China starting in 2018 European calendar and
===> now through the destruction of the Arab Gulf countries, all leading investors in Africa.
.
Check this comment from over a year ago:
What nobody is talking about is, Trump's (or those behind him) hidden agenda in all this chaos could be directed against completely different targets, namely Global South regions.
The public assumption is, he created this chaos to help the manufacturing sector in his country, to reduce deficit, to harm China, etc. One should better assume that, the guy's targets are Global South countries, and his goal is to reduce economic activity and growth in those regions. One could even assume, that was also his target, when he started the trade war in 2018 European calendar, that got very dramatic with the COVID-19 pandemic, that people link with him and Pentagon.
We have heard discussions, where European descent USA citizens ARE FURIOUS about China spending the money it made from trade with their country IN AFRICA ! By the way, it is not just European descent USA citizens, also Europeans are also furious about that, and they and USA went even as far as asking China "please don't invest much in infrastructure in Africa".
This is an absolutely gigantic hostility by ungrateful European descent people, whose industrial revolution was started by capital accumulated from African descent labor and African invention (Europeans copied the tool for producing textiles from Africa). And the Africans are carefully observing this European descent hostility. Sadly for European descent people, how furious they might be, in the meantime, they are too weak to sabotage developments in the mighty Global South. These guys are even no longer trading with western countries.
.
I got a bad news for Trump and company, who desperately want to prevent industrialization and development in Africa:
The Africans need absolutely nothing from non-Africans, let alone capital, that they can print in their central banks, even not technology, as they are now in a position to reverse engineer every Western product.
In past millennia and centuries, it was Europeans who copied from Africans, now it is the other way around.
.
Really, African countries do not need to go to anywhere to finance infrastructure projects.
The African countries could simply print their own money, and give that money to contractors. The contractors will then buy the necessary inputs with that money from the local market and build the infrastructure.
What inputs are necessary in infrastructure projects ?
Steel
Glass
Cement
Asphalt
Manpower
Machinery
Most African countries have those things locally available.
.
What a funny situation, at this moment, the mighty Global Southerners have growth and deflation at the same time (not deflation and stagnation), while Westerners have inflation and stagnation (not inflation and growth) at the same time, and with an aging population.
For example in Africa, they have a giant backlog of infrastructure projects, that will ensure decades of growth on the continent.
Roosevelt's Public Works Administration from 1933 European calendar, with more than 34 000 projects, including the construction of airports, large dams, major warships, bridges, schools and hospitals, is peanuts compared to what is happening now in Africa. These guys can now finish the construction of apartment buildings in just 90 days, all that using local resources.
.
Today African countries are more industrialized than USA:
GDP by sector (Typical African country)
.
Agriculture: 35.5%
Industry: 23.11%
Services: 36.81%
.
.
GDP by sector (USA)
.
Agriculture: 0.9%
Industry: 18.9%
Services: 80.2%
.
The statistics are saying that, African countries are more industrialized than USA (Industry: 23.11% VS Industry: 18.9%)
let us try to read the minds of those who made this plan:
These guys could easily predict the response of Iran to the bombings against it, that means, they expected, the oil and gas installations of the Gulf Arab countries will be destroyed, denying the affected countries income for a period of time.
That means, the planners knew, during that period, the Gulf countries won't have the money to invest in other regions such as Africa.
They knew, high oil prices will cause a global economic crisis.
They knew, the following reconstruction will benefit both the USD and USA companies. Perhaps, they hoped, they could repeat the effect WW2 had on the USA economy. That could even have been the driving motive for starting the war against Iran.
.
If we could assume that, the appropriate response of the affected countries to that should be to not involve USA companies in the reconstruction and use currencies other than the USD to finance it.
Lmao, in italy its normal about 1.8€/L, now is 2/2.2€ and people from the us complain about 0.8/1€/L even though they have more money and more power lmaoo
EconomistWithaD | a month ago
The current crude futures price is $108. From the Fed’s modelling, we have seen an increase in oil prices of about 67%.
Now, the numbers below are from this Fed DSGE modelling exercise, and it’s going to depend on how long this shock lasts, but let’s assume it doesn’t appreciably decline too fast.
Inflation is going to be 1 percentage point higher for 5 quarters. That’s inflation going from 2.4 to 3.4%. So long as the shock is relatively short lived, these inflation effects go away.
Real GDP is half a percentage point lower for about 2.5 years, with it remaining 0.4 pp depressed permanently. This would make the GDP read in Q4 go from 1.7 to 1.2/1.3.
After about 2.5 years, real wages are 0.67 pp lower permanently. We’ve celebrated low income real wage growth of about 2 pp per year (2019 to 2025), so this is a real kick.
So, while oil price shocks HAVE become less bad since stagflation, they are still very bad, with significant impacts lasting at least a year.
LimpAd4924 | a month ago
FFS the economy was already shaky. We’re cooked… but hey, on the bright side, at least Americans will pay for their stupidity.
Adorable-Database187 | a month ago
We're all fucked, but at least the Americans got the president they voted for.
Ohuigin | a month ago
Think of all the dogs and cats that won’t be eaten though!!
/s because this country is fucking stupid.
Accomplished-Cow-234 | a month ago
I mean if food prices rise enough...
LimpAd4924 | a month ago
Hey now, that might be true but the bigger issue is we have a compromised government and billionaires furthering the agenda of right wing think tanks that blatantly lie to get elected (as felons).
Javier-AML | a month ago
Yeah, because stupid people voted for them.
LimpAd4924 | a month ago
True but years of screwing up public education and spreading disinformation (especially most recently via social media) made the recipe for this possibility.
someambulance | a month ago
This is 50 years in the making. Neoliberalism reinvigorated the dying GOP.
LimpAd4924 | a month ago
True. But she had a funny laugh… /s
deraser | a month ago
We got the president too many of my fellow citizens decided to vote for.
projectx51 | a month ago
I didn't vote for that mother fucker
EliNoraOwO | a month ago
I didn’t vote for that guy…
deiprep | a month ago
Well you get to suffer anyways 🎆🎉🥳
OklahomaTiddy | a month ago
great work, y'all!
/s
Poopingisasignipoop | a month ago
It’s the price we had to pay to keep pedophiles, embezzlers, and insurrectionists out of prison.
parchedpillock | a month ago
Ha he ain't even done. Inflation in the US is not a good story for him either, he will need to distract the population there with more tariffs and a war in Cuba.
p_pio | a month ago
Oh, cry me a river. The US got massive oil production, so for you guys costs will at least partially be offset. Rest of the world though? Screwed. Massievly. Especially as food prices are correlated with energy products.
Europe, Africa, Asia? They all will pay why you guys will complain that things are a bit worse and how much you sacrifice because of this war.
LimpAd4924 | a month ago
U.S. oil production doesn’t offset global markets, which is what we pay. U.S. oil is not nationalized. Are Americans this dense?
bjdevar25 | a month ago
And it never will be if big oil has anything to say about it. Exon Mobil is partying as we speak.
p_pio | a month ago
Ok, I didn't remmeber, most people on this sub can't do basic thinking beside "Trump bad"...
What happens when you shut production of the good in one place, especially when demand is inelastic? Relative value of production of other producers increase.
So in case of the current war: value of the US oil increased. What does it mean? Terms of trade for the US improve. We can see it in appreciation of dollar.
That has few important results for the US. First: massive increase in income by the US oil corporations boosting tax revenues. Second: for rest of population: costs will be offset partially by cheaper imports. Third: potential increased imports will add to tax revenues due to tariffs.
Americans at large? Will pay insignificant part of costs of this war, and only because the US got not much of social state. Because the US may even profit on this war. Rest of the world though, aside of like Canada, russia, Kazakhstan, Nigeria etc.? Yeah...
If this will be prolonged war and crisis, there will be famine in Africa. And a bit of worse quality of life for Americans. Which will be resolved with stimuli check or something like that.
Solace2010 | a month ago
My god lol you actually think the US citizens will benefit from this…lol
p_pio | a month ago
No. I think that their cost will be offset. We just got same thing 4 years ago. The US by any indicator was aproaching recession in 2022. And it didn't happend.
But what happend was war in Ukraine. Energy prices spiked, the US got a bit worse inflation than it would probably get regardless as high increase of money supply from 2020 was reaching real economy. But that's all.
The US economy was growing despite all indicator saying it shouldn't. But capital outflow from Europe, increased income from selling energy goods etc meant that any costs of economic problems US could have were offset hitting in that time the EU instead.
Most US citizens will get poorer... Slightly. But US at large? It might see some decline, but limited. And there's even chance it will actually gain net profit in short term. Because cost will be paid by the rest of the world instead.
Yesyesnaaooo | a month ago
That’s because at that time Biden was able to use the strategic oil reserves to smooth out the cost of Oil in the US.
Those reserves were never replenished, because the price stayed high until this last 6 months when they should have been replenished.
Trump should have known about the Iran war at that time and replenished them, he even said he was going to … but he didn’t.
So, yeah … the US is going to feel it this time.
DFWPunk | a month ago
The stimulus checks we have received in my lifetime, and I'm 55, have never been enough to "resolve" the impacts of the related economic events.
LimpAd4924 | a month ago
Thanks for your layman subjective opinion. My comment also had nothing to do with Trump. Are you one of his cucked supporters that worship him? Your personal opinion is pretty much illegitimate, especially if you’re just a high school level grad.
p_pio | a month ago
>you guys will complain that things are a bit worse and how much you sacrifice because of this war.
You. Because I'm not from the US.
And simple question: which part of what I said is false?
Does US have massive oil (also: natural gas etc) production? Yes. Does its relative value spiked due to war? Also yes. Does it improve US terms of trade? Yes. Should it increase tax revenue? Yes. Should it make imports relatievly cheaper for the US? Yes. Should these relatievly cheaper imports again increase tax revenue? Yes.
Will US profit on the war? Relatieve to pretty much all other countries aside selected few (e.g. russia, Canada, Norway) definietly, quite probably even just "yes" in a short term.
LimpAd4924 | a month ago
So we’re just basing this off your non expert opinion and speculation? 🤣 did you make it beyond high school?
p_pio | a month ago
With this level of shock: it's all speculation. Last time we had something comparable was at least 20 years ago (Iraq) and probably rather 50 years ago (OPEC).
Who said non-expert?
You are slippin' man. You can't refute any point so you try to you use rather poorly ad persona argument.
LimpAd4924 | a month ago
Why does everyone in the internet think they’re entitled to some debate? You never cited studies or anything reputable to begin with.
XILeague | a month ago
US could produce the oil as much as they want, yet they cannot say their companies to sell the fuel at the "socialistic" prices. They are going to sell it at the global prices to ensure the companies aren't going to lose the money due to the domestic market.
And if the oil would hit 200 they are going to hit everywhere, including the US themselves. And if the fuel is going to be sold at 200 to the domestic oil refineries, then the domestic fuel prices are going to be corrected accordingly.
128-NotePolyVA | a month ago
The US can’t set the global oil price. But they can release oil from the strategic reserve at home and cut it with ethanol.
I_divided_by_0- | a month ago
In case you didn't know. Our SORs are out. Trump (nor Biden from 2022 when he used it) never replenish it.
https://www.moneycontrol.com/world/how-a-missed-opportunity-by-trump-left-us-exposed-to-oil-shock-amid-iran-war-article-13852975.html#google_vignette
>US President Donald Trump’s decision not to replenish the country’s Strategic Petroleum Reserve (SPR), which had been heavily drawn down by his predecessor Joe Biden, has left American consumers vulnerable to an oil price shock following US and Israeli attacks on Iran, The Financial Times reported citing analysts.
>According to the report, the reserve — created in 1974 after the 1973 Arab oil embargo — remains well below capacity after Biden released large volumes of crude to tame fuel prices following Russia’s full-scale invasion of Ukraine in 2022.
>The SPR currently holds about 415 million barrels of oil, enough to cover roughly 20 days of US consumption, far below its 714 million-barrel capacity.
128-NotePolyVA | a month ago
Time to make nice with Canada and Mexico to increase output. Start converting that corn. The whole thing is a mess. Groceries will go up again yet with the price of transport up.
Anfield_Cowboy | a month ago
Don’t forget anything in a piece of plastic is tied to the oil market, amongst many other things. Oil has a massive impact on olefin based chemical markets.
I mean, every piece of food you buy is basically wrapped in plastic somewhere or multiple times.
Accomplished-Cow-234 | a month ago
Hey man, at least congress stuck its neck out and said that we needed to reduce the size of the reserve. Not that the presidents couldn't have just ignored congress congressional mandate
bjdevar25 | a month ago
Except the morons didn't replenish the reserve before starting the war.
speedmankelly | a month ago
No more oil reserves. SOL.
Playingwithmyrod | a month ago
Oil companies are private entities and sell to the highest bidder. As long as global prices are high US prices will be high. Unless we go full socialism and take government control of the oil industry Venezuela style.
austinwiltshire | a month ago
Don't give "capitalist" president trump any ideas.
Anfield_Cowboy | a month ago
It definitely is, but those other markets will take a larger hit, because of all the other logistics necessary.
GhostofBeowulf | a month ago
...Inputs go up and the cost of production goes up too homie. Basic economics here...
WinterAd825 | a month ago
Ohh no trust me, as an American… it’s going to hit the U.S. A. Do you think US oligarchs will care and use oil strategically for the country? Lol, there 100% going to seek it on the international market B. Even without that, this is going to hit a ton of other resources the U.S. imports C. The Middle East is also a critical supplier of sulfur and fertilizer so that’s also getting hit D. Super is used in copper and cobalt production so that’s also getting hit E. Also in this Administrations brilliance… they…
My fellow citizens are about to find out what they voted for
GhostofBeowulf | a month ago
So will the rest of the world tho...
LimpAd4924 | a month ago
Of course. He’s an imbecile and just killed US hegemony his term already.
OldManufacturer8679 | a month ago
Too bad they won’t learn from it.
LimpAd4924 | a month ago
No because right wing billionaire media peddles lies and excuses. The only solution is to ban and destroy it
Swimming_Agent_1063 | a month ago
War is good for the economy genius
LimpAd4924 | a month ago
Source: trust me bro
LimpAd4924 | a month ago
Yeah it was so good it prevented the 2008 recession… oh wait
Angry_beaver_1867 | a month ago
That’s just the U.S. though. The impacts are going to be much harsher in areas more dependent on Middle East supply as they might experience outright shortages with a 20% drop in oil availability
EconomistWithaD | a month ago
Sure. But it’s estimates based on the Fed. Obviously American only.
Accomplished-Cow-234 | a month ago
And let us not forget the regional effects will be heterogeneous. Oil producing areas and maybe refining areas could benefit or have the impact ameloriated; but thag means the other places are getting the worse side of the feds model.
ayymadd | a month ago
That's quite a huge impact, and USA's economy is probably the best prepared for it.
I'd guess the impact on most of the other countries would be worse.
nontoxicdude | a month ago
Im cutting back on stuff. Have a backup cell line that im considering getting rid of even though its not very expensive
Cutting back on a few things adds up
jujumber | a month ago
It's probably a good time to review all the random subsriptions I have and cancel anything I'm not using often.
Terry_Cruz | a month ago
Real food is too expensive these days. I am switching to soylent.
CaptainJin | a month ago
Can't wait for the prices to keep rising till 2028, then suddenly they'll start dropping just before election season to critical acclaim of Trump's handling of the gas crisis caused by Hillary Clinton.
weednspacs | a month ago
It’s already falling. Did you forget about TACO
Cohens4thClient | a month ago
Haven't you heard?
Everything bad that ever happened is because Hunter Biden has an absolutely huge penis
Candid_Cat_5921 | a month ago
So does this mean we’re likely to see stagflation? I’ve already noticed a drop in traffic around my town and bars are almost empty at times when it used to be booming. People are already cutting back on local travel it seems.
HimTiser | a month ago
I bought a truck on the last day of February, funny timing i know. This was in Phoenix at a relatively large domestic brand. I was one of three people buying a car and even stepped foot in there the whole time from 8am-1am. They were desperate to move cars, and the people just weren’t there.
Contren | a month ago
There was solid stagflation risk anyway with the way Trump has meddled with the economy via tariffs and other risky behavior to let the problem smolder.
Now they effectively poured oil on that.
EconomistWithaD | a month ago
No, not necessarily. The oil price shock of today is much different than that of the 1970’s, and Ukraine didn’t cause it either.
OrangeJr36 | a month ago
More importantly, the Fed has the study of the 70's oil shock to help navigate what might come.
EconomistWithaD | a month ago
The WSJ had a good article today on how though this is a scenario that could get really bad really quick, the 70’s are less insightful today than in the past.
Gift link
speedmankelly | a month ago
Ukraine didn’t cause it because we used our SPR, we never replenished them so it’s going to be worse this time
EconomistWithaD | a month ago
The SPR isn’t a stagflation prevention device.
Remote-Ask7999 | a month ago
Yes
aznPHENOM | a month ago
I almost rear ended a car yesterday that was part of the line until a small gas station on a 6 lane road. Price was $3.16 cash. My neighborhood was $3.59 while that area tends to be higher so I definitely understand the line but dang. so unsafe due to being on such a huge road.
naamingebruik | a month ago
This is one of those moments where I'm happy I drive an EV and I hope we can finally find the motivation to step up efforts to become lose fossil dependency in the EU
Much_Lingonberry_37 | a month ago
I think electricity cost will also go up.
wreckitralph_201 | a month ago
Alongside everything
Life_is_Okay69 | a month ago
But hey, he drives an EV.
naamingebruik | a month ago
yeah which is still cheaper than gasoline and has a much lower maintenance cost than internal combustion engine cars
SpicyCommenter | a month ago
Even if you get power from gas generating sources, EV's convert more than double their input fuel compared to combustion engines.
naamingebruik | a month ago
I have solar panels though, and I have the Chargepass charging card with a 4€ per month subscription. At Ionity chargers that means I pay 0,39€ per kwh 0,29€ even when driving in France.
Also at home I have a fixed price contract for electricity.
Much_Lingonberry_37 | a month ago
That's good. I really hope solar panels and EV proliferate. But right now, the world is still dependent on oil so there will be secondary impact even on solar panels and charging.
nipplesaurus | a month ago
Even in areas in which energy is generated by nuclear, hydro, wind, and solar?
Much_Lingonberry_37 | a month ago
Yes, opex will increase. The trucks, ships, and cranes used to transport people, equipment, or parts for maintenance. The cost of materials to maintain the plants, panels, or turbines.
SoulshunterIta | a month ago
In the EU, most electric markets use the marginal pricing system. In layman's terms, the price of energy depends on the price of the most expensive energy source. (This is a huge simplification)
naamingebruik | a month ago
Yeah there's talk of reforming this but the energy companies are against this
Top-Acadia-1936 | a month ago
I’m concerned about gas prices. I never got to a place where I needed or wanted an EV. I work from home, but the other two cars in my home have extremely short commutes to work or school. Under 2 miles one way, each.
I’m mostly concerned about the job losses to come. As I am WFH, I’m very expendable. Replacement income in my region is very hard to come by, within a job market that is terminally frozen and has been for 2 plus years. I carry zero debt at all, but I do rent.
I’ve prepared best I can. Saved diligently, but have notably kept much of it out of risk-based investing. More or less expecting our economy to fully go off the rails at some point.
I just dread it all. In my 27 year working career, this will be about the 5th time on my watch that great uncertainty was introduced. I’ve lost work 4 of those times.
Tickstart | a month ago
Imagine using a car to go less than 2 miles.
Razur | a month ago
Right? But sadly the US doesn't have walkable towns.
I grew up less than 2 miles from every school I attended. But there are no sidewalks or bike paths connecting my neighborhood to any schools. It's like that for grocery stores, libraries, everywhere.
Vlaed | a month ago
I can walk or bike 2 miles north or south. East and west are not doable because of how the roads and highway are setup.
If I wanted to go 2 miles east, I'd have to go about 4.5 miles to get there. Safety is average. If I wanted to go 2 miles west, I'd probably have to go 5 miles. It's about as unsafe as I could get without running across a highway.
owningmyokayniss | a month ago
Not all cities are walkable, and the children may be too young to walk that far in the morning
Electronic_Will_5418 | a month ago
I used to live 5 miles from my job (apartment home to industrial park job) until I moved further away. I biked every day but it was dangerous, there was no bike lane and no sidewalk. No way to bike was good for me or for the cars - if I used the whole lane (as is recommended), cars would line up behind me and lay on their horn until they could pass. If I kept to the right of the lane, cars would get within 2-3 inches of me usually going 45 in the 35. Keep in mind in the USA (especially in the south where I am at) most people keep handguns in their car and cyclists getting shot at by car drivers in a road rage is not uncommon.
If I took public transit, it would take me 1.5 hours (at minimum) to travel those 5 miles, since there existed no direct public transit route, including a 1 mile walk to the nearest bus stop from my apartment, two bus transfers, and a 1 mile walk to my job from the last stop.
No carpooling option since none of my coworkers lived anywhere close to me.
So, I biked every day, and just dealt with the very real, very increased safety risk, because I didn't want to waste money on gas. I was the only person I ever saw on a bike going to work in my area.
Have you ever lived in an area that is not bike or pedestrian friendly? People don't always live or work in the ideal situation and have to make the best with what they have. I would love for everywhere to have 3ft+ wide sidewalks & dual direction bike lanes but that isn't reality in the huge majority of the USA.
tara1245 | a month ago
I'm not even sure marked bike lanes add much safety without a structural barrier. We have well marked bike lanes and you still read about multiple bicyclists being killed by motorists every year. Never heard of anyone getting shot so at least that's something. Honestly I feel safer mt biking than road biking even though I'm sure statistically that is wrong. But at least you have some control compared to being defenseless against a bad driver.
ElectricOutboards | a month ago
Reminder that the Zionist state has its arm shoved up Drumpf’s ass to the shoulder and is working him like a muppet to do their dirty work against Iran. Think about this sham, for sale to the highest bidder shitbag we elected and how far you’re willing to let this go, America.
haveilostmymindor | a month ago
Well thafs gonna be 6 dollars a gallon average in the US by Monday and peak petroleum if they continue 8n the rocket ship they are on will be 10 to 12 dollars a gallon on 200 dollar a barrel oil by end March unless something changes
Nebraska716 | a month ago
Gas is up 30 cents right now. Diesel is up about 60 cents for the day.
linedryonly | a month ago
Gas is up 62 cents in my area (east coast). Filled the tank last Monday at $2.69/gal. Again today same station at $3.31/gal.
SoFlaKicks | a month ago
Same. At Costco no less so better pricing than the average station.
Immediate_Pie_3069 | a month ago
It wont be 6 dollars average. Probably around 4 dollars though.
haveilostmymindor | a month ago
Well you have to consider the refinery paradox the US imports heavy sour and exports light sweet fuel because our refineries were set up to process the heavy sour petroleum. So while its true that the US is a net exporter of petroleum we are exporting the oil we can't refine and importing the oil we can.
So we import around 8.5 million barrels of petroleum a day and from the middle east stuff we can refine which is about 1/10 of our imports and about 6.5 percent or so of our total demand. Even if we wanted to simply refine more of our domestic oil its 3 to 5 years for the refining equipment to change in order to process that light sweet crude we have.
But there are tons of refineries set up to process the middle eastern crude and now suddenly its off the market and everyone is basically bidding up the remaining supplies of existing equivalent. Thats gonna continue until the supply shortage is addressed via demand destruction from higher prices or the middle east comes back online.
But it gets worse in the US because we suddenly have a 6.5 percent shortage of processed petroleum on the market which means that refineries can now raise prices additionally to take advantage of that secondary supply shortage.
Now the last time petroleum prices broke 110 dollars a barrel gas prices stayed above 5 dollars a gallon but this time the US is taking a harder hit because like I said we have refineries with nothing to refine so the price peak will be worse at the pump because the middle east impacts US fuel markets harder than Russia did.
tame-til-triggered | a month ago
It's been $4-5 in California since the pandemic. $6 average is definitely a possibility.
Fosterchild56 | a month ago
I admittedly know very little about the economy. But assuming oil prices work like bitcoin and meme-stocks, get your tendies ready boys. We're going to the moon tomorrow 📈🚀
FitEcho9 | a month ago
===> Oil prices soar past $100 a barrel as war escalates in Iran
.
One wonders, if all this is directed against Africa.
Are Trump or USA attempting to sabotage rapid industrialization and development in Africa,
===> first through trade war with China starting in 2018 European calendar and
===> now through the destruction of the Arab Gulf countries, all leading investors in Africa.
.
Check this comment from over a year ago:
What nobody is talking about is, Trump's (or those behind him) hidden agenda in all this chaos could be directed against completely different targets, namely Global South regions.
The public assumption is, he created this chaos to help the manufacturing sector in his country, to reduce deficit, to harm China, etc. One should better assume that, the guy's targets are Global South countries, and his goal is to reduce economic activity and growth in those regions. One could even assume, that was also his target, when he started the trade war in 2018 European calendar, that got very dramatic with the COVID-19 pandemic, that people link with him and Pentagon.
We have heard discussions, where European descent USA citizens ARE FURIOUS about China spending the money it made from trade with their country IN AFRICA ! By the way, it is not just European descent USA citizens, also Europeans are also furious about that, and they and USA went even as far as asking China "please don't invest much in infrastructure in Africa".
This is an absolutely gigantic hostility by ungrateful European descent people, whose industrial revolution was started by capital accumulated from African descent labor and African invention (Europeans copied the tool for producing textiles from Africa). And the Africans are carefully observing this European descent hostility. Sadly for European descent people, how furious they might be, in the meantime, they are too weak to sabotage developments in the mighty Global South. These guys are even no longer trading with western countries.
.
I got a bad news for Trump and company, who desperately want to prevent industrialization and development in Africa:
The Africans need absolutely nothing from non-Africans, let alone capital, that they can print in their central banks, even not technology, as they are now in a position to reverse engineer every Western product.
In past millennia and centuries, it was Europeans who copied from Africans, now it is the other way around.
.
Really, African countries do not need to go to anywhere to finance infrastructure projects.
The African countries could simply print their own money, and give that money to contractors. The contractors will then buy the necessary inputs with that money from the local market and build the infrastructure.
What inputs are necessary in infrastructure projects ?
Steel
Glass
Cement
Asphalt
Manpower
Machinery
Most African countries have those things locally available.
.
What a funny situation, at this moment, the mighty Global Southerners have growth and deflation at the same time (not deflation and stagnation), while Westerners have inflation and stagnation (not inflation and growth) at the same time, and with an aging population.
For example in Africa, they have a giant backlog of infrastructure projects, that will ensure decades of growth on the continent.
Roosevelt's Public Works Administration from 1933 European calendar, with more than 34 000 projects, including the construction of airports, large dams, major warships, bridges, schools and hospitals, is peanuts compared to what is happening now in Africa. These guys can now finish the construction of apartment buildings in just 90 days, all that using local resources.
.
Today African countries are more industrialized than USA:
GDP by sector (Typical African country)
.
Agriculture: 35.5%
Industry: 23.11%
Services: 36.81%
.
.
GDP by sector (USA)
.
Agriculture: 0.9%
Industry: 18.9%
Services: 80.2%
.
The statistics are saying that, African countries are more industrialized than USA (Industry: 23.11% VS Industry: 18.9%)
FitEcho9 | a month ago
Guys,
let us try to read the minds of those who made this plan:
These guys could easily predict the response of Iran to the bombings against it, that means, they expected, the oil and gas installations of the Gulf Arab countries will be destroyed, denying the affected countries income for a period of time.
That means, the planners knew, during that period, the Gulf countries won't have the money to invest in other regions such as Africa.
They knew, high oil prices will cause a global economic crisis.
They knew, the following reconstruction will benefit both the USD and USA companies. Perhaps, they hoped, they could repeat the effect WW2 had on the USA economy. That could even have been the driving motive for starting the war against Iran.
.
If we could assume that, the appropriate response of the affected countries to that should be to not involve USA companies in the reconstruction and use currencies other than the USD to finance it.
GattoNonItaliano | a month ago
Lmao, in italy its normal about 1.8€/L, now is 2/2.2€ and people from the us complain about 0.8/1€/L even though they have more money and more power lmaoo
Terrible_Cable_4472 | a month ago
Sorry you're italian
GattoNonItaliano | a month ago
Yeah, im sorry too