Obviously there has been a disruption – fuel prices have increased fairly significantly, and major secondary products (like Urea for fertiliser) have also risen significantly.
But we aren't really seeing actual shortages. Things like aviation fuel, which were posited to be something that we would quickly burn through excess capacity of, remain widely available.
Financial markets also seem relatively unaffected – obviously there is a lot of noise there (earnings and the fact that a lot of large companies don't have as much direct exposure to oil as they once did) – which seems surprising.
What gives? Is there just a lot of excess capacity in the system and the media is overhauling the impact? Does fuel just represent quite a small proportion of operating expenses for most companies so it's only really manifested as a small profit decrease?
We're several months into the Iran war – why aren't we seeing very dramatic economic impact?
byu/Emberkahn ininvesting
Posted by Emberkahn
10 Comments
While everyone and all of the different media outlets say they know what’s going to happen, truthfully no one does. It may have a large impact or it may not. Who knows when. I do not believe we have been in this situation in this way before so no one knows for certain. They will all pretend they do for your attention though.
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There are aviation fuel shortages. This is why prices have increased and flights have been reduced all around the world.
Eslr and treasury support. We have a stealth stimulus going on
The United States is a net oil exporter. It’s probably a bigger issue in energy important dependent economies?
A lot of time lag due to ships being enroute, plus a lot of oil reserves were released from around the world. Lots of flights in europe were cancelled.
Upcoming planting seasons will be interesting. Most of western farmers will pay the higher premiums to plant more expensive crops at least, while africa… can’t…
1) The stock market is an economic indicator, but it is not the economy
2) I’m assuming you are in the US. We are major energy producers, so the impacts are quite blunted here. Still, I paid a new high for gas the other day.
3) spirit airlines is going under. Sure they are a weak airline, but the fuel prices put it over. The other major airlines are absorbing the costs as long as they can. Dominos will start to fall. Other airlines are cutting routes, and a trip we had planned this summer is going to require more layovers
Just hold your beer, the best is yet to come…
Gas prices is a dramatic impact. It is having ripple effects everywhere. What exactly were you expecting to happen ??
Countries have been dumping strategic reserves to keep oil from going crazy. Eventually it will though. Can only hold the ball underwater for so long.