Jason Bordoff

We're already seeing countries that struggle to afford high prices in Southeast Asia.

Thailand, Indonesia, Malaysia, countries like that have announced work from home one day a week.

They are having school closures, putting in place emergency measures to cut fuel.

So the question is, how high a price do you need for the global economy to use something like 10 million barrels a day less of oil?

And that's a pretty high price.

And there's, you know, in the 1970s, there was a little actually lower hanging fruit.

There were some opportunities to reduce oil use that were a bit easier.

We've kind of gotten the low hanging fruit out of the system.

And so today, you know, the things we use oil for, there's not a huge number of substitutes in the near term.

In the long term, obviously, you can buy an electric car instead of an internal combustion engine, that sort of thing.

But in the near term...

There's not that much you can do except shut down economic activity and maybe take the subway or bus instead of driving.

And, you know, businesses will make different choices.

Well, it depends how high oil prices go, of course.

But if you're talking about the kind of levels that would be needed to make 10 million barrels a day of oil demand go down, then yeah, that is the sort of price level that could push the economy into recession.

I mean, I think it has the potential to be really quite devastating.

We saw that in the 2022 energy crisis, which was largely limited to natural gas.

It didn't affect oil markets as much.

So when Europe lost access to natural gas from Russia, what did Europe do?

It went into the global market for liquefied natural gas.