Every major US oil shock above 4% of GDP was followed by recession and 2026 is below that threshold
Every major US oil shock above 4% of GDP was followed by recession and 2026 is below that threshold
https://i.redd.it/ciuf1geg3cwg1.png
Posted by Low_Ability4450
19 Comments
Low_Ability4450 on
One thing I found interesting is that the key variable may not be oil price itself, but oil burden relative to GDP. $120 oil in 1980 was not the same macro-economic shock as $120 oil today. US oil intensity has fallen sharply and this 2026 spike was also unusually short. Happy to be challenged on the 4% threshold or the methodology.
deadrobertspirate on
It’s not over yet not even close
Patello on
What about 2011 per your graph?
Amber_ACharles on
Good framework for direct crude. The downstream gap: 92% of sulfur comes from refining, becomes sulfuric acid for copper and cobalt extraction. Those feedstock chains compound in ways crude-GDP ratios don’t capture.
FriendToPredators on
The graph is nice and clean but perhaps too much so. In many of those cases the price of oil is just the latest jenga block in an already teetering tower.
Instead of a housing bubble and rife financial industry fraud we have crypto, a redux of the dot com bubble, random consumer price shocks from tantrumesque import policy, a dot com bubble redux, record wealth gap, rampant scams on our wealthiest yet mentally decaying elder population, etc etc. Does the threshold move with the economic environment?
OneTwoThreePooAndPee on
Sorry to say it but this war has only just begun.
PhilosophySalt7695 on
So this data says it used to happen, but no longer happens.
tracenator03 on
This isn’t really considering the fact that a large portion of US GDP stems from AI today. AI is propped up by massive investments from the Gulf States. AI expansion requires resources that are being blocked in the strait. I’m sure the Gulf States are more worried about fixing up their infrastructure than they are about continuing AI investments.
ourochurros on
“ceasefire – peak receding” is an assumption you are making that seems to not be playing out.
The main thing this plot seems to show is that the *rate* of the 2026 shock blows everything else out of the water…. and it’s still going on.
BakedPotaTomato on
2000 is bs there was a recession in early 2001….. your data seems crappy
2starsucks2 on
With such low sample count and you are already having a false positive and a false negative. Not a good model.
wormtheology on
It’s safe to assume *something* breaks in the next 18 months. My personal view is that LLM/Generative AI related investments take a steep nose dive first. If the Internet Chuck-E-Cheese token is still trading 75.32k above intrinsic value, you know we aren’t even in the baby steps of hitting that cliff. People are still flush with cash and that cash is still finding its way through the economy. The order of operations for collapse in my humble opinion is Bitcoin chokes, which cripples confidence in the speculative tech markets, then LLM/Generative AI, then it’ll hit the broader indexes.
For the Global South? There’s going to be shortages of everything because they can’t just print money and buy commodities on the global market like the G7 can. I will say that before a general recession in the States, we’re going to see a Gulf State collapse first, namely Bahrain. Elevated stress in the ME and Global South will occur before the contagion of fear gets passed to the Western markets.
Ok_Intention1222 on
So glad we plunged the world into a global recession for Israel
Jetfire911 on
Man I wonder if the impulse of a shock matters…
Complete-Paint529 on
Correlation does not imply causation.
Or, lies, damn lies and statistics.
The question is *not* whether US GDP has outgrown oil dependence, it’s how much of that GDP retains dependence on cheap petroleum. This question demands a far more sophisticated analysis than what is presented here.
Reggio_Calabria on
I love traders. If I spend enough money to engineer a specific outcome in specific conditions once or twice, then each time these conditions reappear people will put all their money in to help me achieve the outcome I wanted.
PapaTahm on
U.S is already in a recession.
JOB market is a Nightmare.
The Market is living in a daydream and it’s only due to AI Hyper
High Inflation
Affordability
High Debt on households- (Disguised as Increase spending)
Stagnant Wages
Weakening Productivity
A bunch of Negative Market Indicators
It’s just that the combination of the NEBR taking 6-18 months and the current administration currently obscuring data, is not allowing the official “We are in a Recession” notice to come.
But U.S is definitely in a Recession already
That is why every single economy and investor is diversifying.
They know they have this time window prior to the announcement to get the fuck away from the USD before mass panic comes.
DrPsyz9 on
Interesting… now do consumed sentiment and stagflation.
Grapetree3 on
How is an oil price shock measured in terms of GDP?
19 Comments
One thing I found interesting is that the key variable may not be oil price itself, but oil burden relative to GDP. $120 oil in 1980 was not the same macro-economic shock as $120 oil today. US oil intensity has fallen sharply and this 2026 spike was also unusually short. Happy to be challenged on the 4% threshold or the methodology.
It’s not over yet not even close
What about 2011 per your graph?
Good framework for direct crude. The downstream gap: 92% of sulfur comes from refining, becomes sulfuric acid for copper and cobalt extraction. Those feedstock chains compound in ways crude-GDP ratios don’t capture.
The graph is nice and clean but perhaps too much so. In many of those cases the price of oil is just the latest jenga block in an already teetering tower.
Instead of a housing bubble and rife financial industry fraud we have crypto, a redux of the dot com bubble, random consumer price shocks from tantrumesque import policy, a dot com bubble redux, record wealth gap, rampant scams on our wealthiest yet mentally decaying elder population, etc etc. Does the threshold move with the economic environment?
Sorry to say it but this war has only just begun.
So this data says it used to happen, but no longer happens.
This isn’t really considering the fact that a large portion of US GDP stems from AI today. AI is propped up by massive investments from the Gulf States. AI expansion requires resources that are being blocked in the strait. I’m sure the Gulf States are more worried about fixing up their infrastructure than they are about continuing AI investments.
“ceasefire – peak receding” is an assumption you are making that seems to not be playing out.
The main thing this plot seems to show is that the *rate* of the 2026 shock blows everything else out of the water…. and it’s still going on.
2000 is bs there was a recession in early 2001….. your data seems crappy
With such low sample count and you are already having a false positive and a false negative. Not a good model.
It’s safe to assume *something* breaks in the next 18 months. My personal view is that LLM/Generative AI related investments take a steep nose dive first. If the Internet Chuck-E-Cheese token is still trading 75.32k above intrinsic value, you know we aren’t even in the baby steps of hitting that cliff. People are still flush with cash and that cash is still finding its way through the economy. The order of operations for collapse in my humble opinion is Bitcoin chokes, which cripples confidence in the speculative tech markets, then LLM/Generative AI, then it’ll hit the broader indexes.
For the Global South? There’s going to be shortages of everything because they can’t just print money and buy commodities on the global market like the G7 can. I will say that before a general recession in the States, we’re going to see a Gulf State collapse first, namely Bahrain. Elevated stress in the ME and Global South will occur before the contagion of fear gets passed to the Western markets.
So glad we plunged the world into a global recession for Israel
Man I wonder if the impulse of a shock matters…
Correlation does not imply causation.
Or, lies, damn lies and statistics.
The question is *not* whether US GDP has outgrown oil dependence, it’s how much of that GDP retains dependence on cheap petroleum. This question demands a far more sophisticated analysis than what is presented here.
I love traders. If I spend enough money to engineer a specific outcome in specific conditions once or twice, then each time these conditions reappear people will put all their money in to help me achieve the outcome I wanted.
U.S is already in a recession.
JOB market is a Nightmare.
The Market is living in a daydream and it’s only due to AI Hyper
High Inflation
Affordability
High Debt on households- (Disguised as Increase spending)
Stagnant Wages
Weakening Productivity
A bunch of Negative Market Indicators
It’s just that the combination of the NEBR taking 6-18 months and the current administration currently obscuring data, is not allowing the official “We are in a Recession” notice to come.
But U.S is definitely in a Recession already
That is why every single economy and investor is diversifying.
They know they have this time window prior to the announcement to get the fuck away from the USD before mass panic comes.
Interesting… now do consumed sentiment and stagflation.
How is an oil price shock measured in terms of GDP?