From the Desk of Anthony Pompliano Is This The Oil SHOCK That BREAKS The Economy?
Mar 9, 2026
Rising oil and gasoline prices after tensions in Iran and the Strait of Hormuz spark panic and market moves. Discussion covers global supply shocks, G7 oil releases, and how oil links more to producer prices than consumer inflation. Explores why the US is less oil dependent today, scenarios for short versus prolonged conflict, and investment hedges amid uncertainty.
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Recent Oil Spike And G7 Response
- Oil spiked ~60% over the last month driven by a 42% weekly surge after strikes on Iran's energy infrastructure.
- G7 pledged 400 million barrels release, which immediately cooled the market and prevented an expected $120 oil print.
Historical Link Between Oil Shocks And Inflation
- World Bank analysis: a 10% positive oil shock raises global inflation 0.35–0.55 percentage points within three years.
- Historically oil and global demand shocks drove inflation around recessions in 1975, 1982, 1991, 2009, and 2020.
Oil Affects Producer Prices More Than Consumer Inflation
- Fed finds strong positive link between oil and producer prices but a much weaker link to consumer inflation (correlation ~0.27).
- Higher oil affects PPI more than CPI, reducing direct pass-through to consumers.