Comment by jpiasetz
24 days ago
The shock is smaller, and oil’s importance is less so less likely to cause a recession. In the 70 price went up 400% and oil was rough 1.5x more important. Today price up 100% so the past oil shock was 6x larger
24 days ago
The shock is smaller, and oil’s importance is less so less likely to cause a recession. In the 70 price went up 400% and oil was rough 1.5x more important. Today price up 100% so the past oil shock was 6x larger
You are pretending like the oil crisis of 26 has already run its course. In the 70 crisis, we have the hindsight of several years of how it played out. We don’t even have 1 week of data after the last ship leaving the Strait docked in the US.
Also, the US SPR was created in 1975, so we are going to get to see if it actually works to absorb an oil shock like this.
Most likely there will be some places which are almost unaffected while others are going to see unaffordable price spikes (more than 400%). The pain won’t be spread evenly.