*For the rest of the world.
The cruel irony here is that this really won't affect the US at all. Europe and Asia will feel the brunt of it, and they seem completely uninterested in working toward a solution.
The cruel irony here is that this really won't affect the US at all. Europe and Asia will feel the brunt of it, and they seem completely uninterested in working toward a solution.
ramesh31 2 hours ago [dead] | root | parent | prev | next [–]
>"Why wouldn’t that affect the US? Isn’t the price of oil global? It’s not like US oil will be sold for cheaper to the local population, if that would be the case the incentive would be to export at the higher price instead, no?" Sure, oil is a global commodity, but "global price" doesn't mean uniform impact. The US has been a net petroleum exporter since 2020 and produces ~13M bpd domestically. WTI consistently trades at a discount to Brent, often 10%+. Gulf Coast refineries are configured for the heavy/sour crude we get from Canada and our own shale, not the Gulf-state light/sweet that's at risk here. We also produce all of our own natural gas, have some of the lowest domestic prices in the world (Permian gas has literally gone negative in the past due to oversupply), and a huge amount of our energy infrastructure is set up for it (LNG is a whole other category that is far more expensive than regular gas delivery).
Compare that to Europe, which lost its Russian pipeline supply, has minimal domestic production, and is heavily dependent on LNG and Middle East crude routed through exactly the chokepoints in question. Or Japan/South Korea, which import ~90%+ of their oil and a huge chunk transits Hormuz.
Yes, the US sees secondary inflation effects, diesel feeds into everything, jet fuel into airfares, etc. I'm not saying zero impact. But "large scale inflation" comparable to what the EU is about to eat? No. The structural insulation is real, and it's why the US can posture militarily without the same domestic economic gun to its head that Europeans are faced with.