Quick Take: Rise in U.S. Production Tempers Oil Price Fears

With renewed conflict in the Middle East, attention naturally turnsto oil prices and the potential impact on the U.S.and global economy. In 1973, an OAPEC embargonearly quadrupled the price of oil and was a significant contributor to the economic malaise of the 1970s. Again, atthe end of that decade, the Iranian revolution nearly tripled the price of oil. Fast forward to today: oil prices rose followingthe Russian invasion of Ukraine, butfell during the intervening years despite thatongoing warand rising tensions in the Middle East. One key componentof lower prices: The U.S.has been the world's largest producer of oilfor the last six years, according to Reuters.

U.S. Share of Global Crude Oil Production

Source: Statista. Data 2008-2022

There is,of course,a risk the conflict between Israel and Iran will expand, but the economic impact of a confined conflict is less likely to significantly impactoil prices than it would have a generation or two ago.

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