Oil jumped following US and Israeli strikes in Iran. Brent oil, the international benchmark, rose to $88 on Thursday, up from $61 at the end of last year.
The impact of rising oil prices on the US economy will depend on the extent of transportation disruptions through the Strait of Hormuz, according to Goldman Sachs Research economists Jessica Rindels and Pierfrancesco Mei. “History suggests that oil price spikes driven by geopolitical shocks can be short-lived if markets gain confidence that supply disruptions will be temporary,” they write in a report.
- Rindels and Mei estimate that each $10 per barrel increase in oil prices would reduce US economic growth this year by about 0.1 percentage point (on a fourth-quarter over fourth-quarter basis) if prices stabilize at a higher level. Higher oil prices weigh on households’ disposable income, which in turn limits their spending.
- Goldman Sachs Research finds that a sustained 10% increase in oil prices boosts US headline Consumer Price Index (CPI) inflation by 28 basis points. If oil prices increase by $10 and remain elevated for three months, Rindels and Mei write, US year-over-year headline CPI inflation would likely rise from 2.4% in January to 3% in May.
My Personal Remark
Price of oil is measured in BBL (barrel of crude oil, comes from Blue Barrel) = 159 litres
The US economy loses 0.1 % of its GDP and the EU economy loses 0.2 % of its GDP per 10% price increase. The EU economy is hit twice as hard by the same crude oil price inflation.
Why?
One of the main reasons is that EU doesn’t have any oil resources. Except North Sea (Norway and UK) and Russia (Technically, Russia is on the European / Eurasian continent)
Satirical Note – Norway was smart enough not to join the EU as they knew joining the EU would mean socialist/communist governance from Brussels translating in impoverishing their middle class. UK is not an EU member States anymore – The Brits are always ahead of the rest of Europe. Their survival instinct is a bit sharper than the rest of Europe.
Let’s get back to crude oil prices and GDPs
The price of crude oil at the end of 2025 (31 /12/25) was 61$/BBL However, it would be unfair to take the price of one day, so I’ll take the average price of 2025 which was $68 / BBL.
This means that every increase of $6.8 / BBL means EU loses 0.2 % starting from $68/BBL
The current price of BBL on March 7 is $91/BBL.
A bit of maths: $91 – $68 = $23
$23 / $6.8 = 3.38
3.38 * 0.2 = 0.7%
The EU already lost 0.7 % of its GDP
The total EU GDP in 2025 was approximately $ 19.99 trillion
0.7% of $19.99 Trillion is = approx $ 140 billion (€120 Billion)
So the EU already lost €120 billion. And it’s not even Monday 😂😂😂. We’re cooked.
As usual, it’s always the EU middle class whose paying for the bullshit thats happening in the world
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