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Posted on 04/15/2026 7:23:38 AM PDT by Diana in Wisconsin
The largest oil shock in history caused prices to surge. Now they're so high that they may be causing "demand destruction." That would mean slower economic growth.
Oil prices have started to slip — but not necessarily for reasons that suggest a return to market normalcy.
The International Energy Agency said Tuesday that “demand destruction” has begun to unfold. As a result of the acute energy commodity shortages stemming from the closure of the Strait of Hormuz, oil appears to have reached a point where it is now so expensive that overseas businesses and households have begun curbing investment and consumption.
Countries in Asia, Europe and even other parts of the Middle East that depend on supplies passing through the strait have begun curtailing their use of natural gas, seen waves of flight cancellations and implemented policies to reduce overall fuel use, the agency noted in the report.
It’s a phenomenon likely to affect global economic growth. And while it does not yet appear to be affecting the U.S. economy, any impact would threaten to destabilize an already fragile labor market.
The IEA believes demand destruction could become a global trend.
“Demand destruction will spread as scarcity and higher prices persist,” it said.
The report comes as President Donald Trump has announced a targeted blockade of the Strait of Hormuz in a bid to increase economic pressure on Iran. The global economy has so far proven resilient — but that may soon change.
Traders have begun pricing in the new dynamic. The international price of a barrel has fallen to less than $98 after rising to as much as $118, while U.S. crude has fallen to $95 a barrel after hitting approximately $113 earlier this month.
U.S. gasoline prices have also begun to show slight declines from recent highs, according to AAA data.
While some of the decline is also due to hopes that the ceasefire announced last week will hold, Trump’s blockade is likely also playing a role.
As supply shortages become more acute, demand by definition will have to decline.
“Resuming flows through the Strait of Hormuz remains the single most important variable in easing the pressure on energy supplies, prices and the global economy,” the IEA said.
In a note to clients published March 31, Joseph Brusuelas, chief economist at RSM consultancy, discussed the lasting harm demand destruction can have on the economy — and why restrictions through the strait of other key industrial inputs besides crude oil, whose prices are also spiking, will also play a role.
“It means fewer cars sold, fewer homes bought, fewer restaurant meals, fewer business investments, and eventually fewer jobs,” he wrote. “And because the Strait of Hormuz crisis isn’t just about oil, the demand destruction this time could reach further than any standard model would predict.”
Thanks to changes in the economy since the 1970s, the potential impact on U.S. consumers may not be as great compared with other regions, he said. More energy efficient vehicles and work from home means the U.S. economy uses about half as much energy per dollar of gross domestic product as it did in 1980, he said. Plus, the U.S. is now a net oil producer.
“There is a real buffer,” he wrote.
More Blah, Blah, Blah at link...
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They do like to push panic porn.
NBC. The National Bozo Channel. (Yawn).
goes up, trump’s fault. Goes down, trump’s fault. Stays the same, trump’s stale economy.
More lies and propaganda from the LSM.
Oil prices dropping is now a bad thing.
Here is the LSM decoder ring code.
Anything good when Trump or a conservative in in charge is always a bad thing.
Yeah. That’s not the reason. The game is ending.
Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...Fear...
So, it’s “Never mind, we don’t want your damned oil”?
“Demand destruction will spread as scarcity and higher prices persist,” it said.”
* Deflection from: ....
* .....for what it’s really called” DEFLATION
* And this Deflation is being caused by the Un-Big Beautiful Golden Big Government Golden Parachute Bill. 30 Trillion of it.
Only the liberal media can turn good news into bad. SMH
We don’t hate them enough.
It means fewer cars sold, fewer homes bought, fewer restaurant meals, fewer business investments.
It’s called learning to save money.
With old age you need all you can get.
Largest oil shock in history? These stupid kids weren’t around in 1973.
And they say the world is ending because oil prices went up, then the world is ending because oil prices go back down.
NBC - Nuthin’ But Communists
The Wikipedia page for Demand destruction was created on July 15, 2007
per Grok
John Maynard Keynes, who had large gains and losses speculating on the stock market, realized that the economics of an asset don’t determine its price, but the traders’ views of the economics of the assets do.
No matter what happens, it’s caused by Climate Change and bad news for Trump.
Demand destruction is a thing.
Still know where near the over $5/gal we paid under Biden...and he was the cause...
So what? It’s not something NBC News made up this week. It’s a solid economic concept.
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