March 28, 2020 By The Editor
Why America has less to fear from an oil shock?
The answer is in its less vulnerability, due to the country energy boom.
When US president Donald Trump announced the assassination of Qassem Soleimani, leader of Iran’s overseas military, western markets wobbled. No wonder. Oil prices initially jumped nearly 5 per cent.
But today’s US economy is far less vulnerable to swings in the oil price — and Middle Eastern shocks.
As Robert Kaplan, president of the Federal Reserve Bank of Dallas, said after Soleimani’s death:
“The effect is going to be more muted than we’ve seen historically.”
There is in fact a big structural shift that Mr Trump knows very well: America’s homegrown energy boom.
The country’s homegrown energy boom has absolutely reduced its vulnerability.
This pattern changes geopolitical dynamics.
In August 2019 the country became a net oil exporter for the first time since records began in 1973, selling 89,000 barrels per day more petroleum than it imported.
Source and more info on: FT.
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