So in one of the last Unhedged episodes: https://www.ft.com/content/826b8f82-5c47-4b0f-8558-02f4475c7fda?syn-25a6b1a6=1
… a host suggested that the United States is much more immune to oil-driven inflation than Europe and emerging markets.
My first reaction was, "eeeeh?"
A couple of things.
- The United States is a massive country – we truck and fly everything. We are heavily transportation-dependent, it still runs on diesel, and the government is pro-actively anti-energy innovation. Transportation costs eat into everything. Most other countries are much more "compact".
- Other countries are more aggressive in their push to renewable energy sources. Spain just hit 100%. Many others are very close to that. The United States is not even in the same universe.
- Other countries have access to cheap Chinese EVs. We don't.
- Oil prices are global. Just because we are net exporter (and only of a certain kind of oil), we are still subject to The Price.
What am I missing here?
Who gets hurt more by the Iran crisis, the US or the rest of the world?
byu/big-papito inStockMarket
Posted by big-papito
10 Comments
different perspective on this. us domestic energy production gives huge buffer that most countries don’t have – when prices spike globally, we can ramp up drilling and fracking pretty quick while europe is basically stuck buying from whoever will sell.
also the dollar being reserve currency means we can absorb some of oil price shocks better than countries that have to convert their currency first. most oil trades happen in dollars anyway so there’s less exchange rate pain for us.
Well, if it leads to a massive blue wave in the midterms then the US and the whole world wins.
Most likely Asia because they import more oil from the middle east.
I mean, the rest of the world will suffer more and it’s not even close. It’s one of the reasons why I so much despise the way the US conducted itself. Some points:
1. The US is the largest producer of oil in the world. There are some issues with refinement (US refineries are mostly not set for the type of oil extracted in the US), so there will be some economic pain, but it is still a powerful card
2. The US is fully self-sufficient for LNG, and the price is not set globally like oil. Huge benefit
3. Some countries are HEAVILY dependent on gulf oil and LNG. E.g., South Korea imports 70% of its oil from there.
4. Many countries in Asia and Africa are dependent on fertilizers from the gulf. The US might have to rotate crops and take a hit to production, but people are unlikely to starve. The UN estimates that 45M people are going to be at risk of acute hunger because of the war ([https://news.un.org/en/story/2026/03/1167147](https://news.un.org/en/story/2026/03/1167147)), and I guarantee you they are not going to be american
5. Currently the issue is the price of these resources, and when price is the issue rich countries can afford to simply spend more to get them. Poor countries in Asia and Africa are going to get shafted when the US and most European countries simply buy up the available stock at unaffordable prices.
6. Finally, and this is the biggest point: the issue is currently the price of these resources, but if the war goes long enough (even just a few months), then it turns into a stock issue, i.e. there literally won’t be enough resources to satisfy needs. If that happens, the countries listed in the points above are in for an absolute world of pain, not even close to the problems that the US will face.
EDIT to add: while we can debate on its robustness depending on your views on AI, the US has been enjoying a rapidly growing economy, which allows for some buffer to take hits. Many European countries were already dealing with very weak growth, and this energy crisis will be a kick in the teeth. Another point where the US will fare much better.
Short-term?
Everyone else, but that’s not to say the average American won’t feel the pain as well. It’s the equivalent of the US losing a fee fingers to other countries losing the whole arm.
Long-term?
The US 100%. This is gonna be the Ukraine war dialed up to 11 where everyone was already trying to speed up the rollout of renewables so as to be insulated from oil shocks. Meanwhile the administration running the US is doubling down on carbon.
And that’s to say nothing of the torched reputation and soft power that the US is losing. This will likely be even worse than the loss of prestige the war in Iraq. At least in Iraq the Bush administration consulted with allies beforehand. Trump spent over a year belittling, threatening and outright hurting out allies he has the gall to demand their help in cleaning up a mess he started?
The US was already losing it’s spot as global hegemon, the Iran war will just be another several, possibly funal, nails in the coffin.
This subject has been beaten to death in this sub
both
Sounds like more fear mongering. They love to say the sky is falling because it gets clicks and views.
That was why they took Venezuela. It has a lot of oil reserves. I think more than the Middle East. But I think it has to be processed but I think they took that into account. So the US should be fine short term.
The US.