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Φανή Πεταλίδου
Ιδρύτρια της Πρωινής
΄Έτος Ίδρυσης 1977
ΑρχικήEnglishSorry President Trump, But Middle Eastern Oil Still Matters

Sorry President Trump, But Middle Eastern Oil Still Matters

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President Trump’s recent assertion that Middle Eastern oil no longer has much importance for the US economy is yet another indication of the insularity of his administration’s economic thinking.

by Desmond Lachman, National Interest

President Trump’s recent assertion that Middle Eastern oil no longer has much importance for the US economy is yet another indication of the insularity of his administration’s economic thinking. To be sure, US energy independence largely insulates the US economy from the direct impact of a Middle-East oil price spike. But it does not insulate the US economy from the spillover effects from an oil price-induced shock to the rest of the global economy.

An escalation in US-Iranian tensions could have a major impact on international oil prices. It could do so through a closing of the Straits of Hormuz, through which around 20 percent of the world’s oil supply passes. It could also do so through Iranian-inflicted damage to the oil production facilities of major Middle Eastern oil producers like Saudi Arabia, Iraq, and the Gulf States.

- Advertisement -

President Trump’s recent assertion that Middle Eastern oil no longer has much importance for the US economy is yet another indication of the insularity of his administration’s economic thinking. To be sure, US energy independence largely insulates the US economy from the direct impact of a Middle-East oil price spike. But it does not insulate the US economy from the spillover effects from an oil price-induced shock to the rest of the global economy.

An escalation in US-Iranian tensions could have a major impact on international oil prices. It could do so through a closing of the Straits of Hormuz, through which around 20 percent of the world’s oil supply passes. It could also do so through Iranian-inflicted damage to the oil production facilities of major Middle Eastern oil producers like Saudi Arabia, Iraq, and the Gulf States.

This article by Desmond Lachman first appeared at the American Enterprise Institute.

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