Why the U.S. is now more resilient to oil price shocks

"Oil is a global market, so when prices rise in one place, they rise everywhere. The current war against Iran has already raised oil prices significantly. Mideast oil production has been slowed by efforts to close the Strait of Hormuz, a key route for oil tankers from the Middle East to the rest of the world, as well as by attacks-and fears of attacks-on oil production, storage, and shipment installations."

"This war has also disrupted the flow of liquefied natural gas from Qatar, which controls almost 20% of the global market. That also affects the world economy and supply chains. Shortages of natural gas affect production of fertilizer and aluminium, as well as other key materials."

"Countries that import much of their oil have to pay other countries for that imported oil. That was a problem for the U.S. back in the 1970s through the early 2000s. The U.S. sent billions of dollars a year abroad to oil-producing countries in the Middle East, Africa, and Latin America."

Oil operates as a global market where price increases in one region affect worldwide prices. Current Middle East tensions have disrupted oil production through Strait of Hormuz closures and infrastructure attacks, while also disrupting liquefied natural gas exports from Qatar, which supplies nearly 20% of global markets. These disruptions cascade through supply chains, affecting fertilizer and aluminum production. Historically, oil price shocks significantly impacted the U.S. economy, particularly from the 1970s through early 2000s, when oil imports created substantial trade deficits. High energy costs forced closures of major industrial facilities and reduced consumer spending on durable goods, triggering widespread layoffs.

Read at Fast Company