Any spike in oil prices with an escalation in US-Iran tensions would be the death knell for many economies that rely on oil to fuel economic growth. As of today, nine major world economies are in a recession or on the verge of one.
2. Dow’s 800-point plunge yesterday (4th worst point drop in its history) came after bad news from two of the world’s largest economies that rely on oil imports: China (major Iran oil customer) reported worst manufacturing output in 17 years, and Germany said its economy shrank.
3. The US is now primarily a service economy that feeds of domestic demand (exports account for just 13% of US economy; consumer spending makes up about 70% of US GDP); US consumers have been paying 25%-40% more for gas vs 2016, cutting into their spending and impacting growth.
4. With US 🇺🇸 sanctions on Russia 🇷🇺 and Iran 🇮🇷, two large oil exporters, Saudi Arabia 🇸🇦 has become an even bigger player wielding even more control over global economies that rely on oil for growth. Saudi Arabia’s crude shipments to China 🇨🇳 have doubled in the span of a year.
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