① According to research by the Dallas Federal Reserve, the surge in international oil prices in the spring of this year reduced US economic output by about 0.3 percentage points, but compared with the 1980s, the shock losses were smaller.
② Although rising oil prices weaken consumer purchasing power, as a net oil exporter, the United States benefits its oil companies and their shareholders, and improved energy efficiency has reduced the economy’s dependence on energy consumption.
June 24 – The latest research from the Dallas Federal Reserve shows that international oil prices once soared to $120 per barrel in the spring of this year, causing US economic output to fall by about 0.3 percentage points. However, compared with the period in the 1980s when the United States was highly dependent on oil imports, the losses caused by this shock were only a very small fraction of those in that era, highlighting that the US economy’s resilience to oil price fluctuations has significantly strengthened.
In the US-backed war against Iran, global oil supply was reduced by about 15%, and the shipping channel through the Strait of Hormuz was closed, causing a shock to global commodity markets. As oil prices soared, supplies in some regions became short, and overall demand declined, the international energy market fell into turmoil.
The research points out that the scale of the global oil supply disruption in 2026 was more than twice the peak disruption during the 1973 oil crisis. Therefore, it is not surprising that this war caused a sharp slowdown in global and US GDP growth.
Dallas Fed researchers estimate that the war reduced economic activity outside the United States by about 1.7%.
However, because the United States is now a net oil exporter, rising oil prices have a “double-edged sword” effect on the economy: on the one hand, higher energy prices such as gasoline weaken consumer purchasing power; on the other hand, oil companies and their shareholders benefit from higher oil prices. In addition, improved energy efficiency also means that the US economy is significantly less dependent on energy consumption than in the past.
Dallas Fed economists Lutz Kilian, Michael Plante, and Alexander W. Richter built a model to comprehensively measure the above positive and negative effects.
The research results show that compared with the periods of oil supply disruptions in the Middle East in the 1970s and 1980s, the US economy is now much less sensitive to oil price fluctuations.
The scale of the oil supply shock at that time was actually smaller than this event, but at that time the United States spent about 8% of gross domestic product (GDP) on oil purchases, while today that proportion is only about 3%.
The research found that if the United States had experienced a supply shock of a scale comparable to this one in the 1980s, US GDP would have fallen by about 5.
6%; at the same time, economic output in the rest of the world will also decrease by approximately 6%.
The above research conclusions corroborate recent economic data. The data shows that the war has caused almost no obvious damage to the US economic outlook: in recent months, employment growth has accelerated somewhat, and household consumption has also been largely unaffected.
Although Federal Reserve officials remain concerned that rising energy prices may push up inflation, they generally believe that this inflationary impact may only be temporary.
Data shows that in the first quarter of this year, the US economy grew by approximately 1.6% on an annualized basis.
