Michael Gapen

Well, two things.

One is...

higher oil prices tend to weaken activity, right?

So gasoline prices go up.

You and I pay more for prices at the pump.

We can't spend it elsewhere.

So demand in the economy actually slows.

It's that softening in demand and that softening in activity, which means other prices don't tend to go up.

Now, this is just what history suggests as the guide.

It may not be the case this time around.

The US has been above its 2 percent target for about five years.

You make good points about, let's say, the downstreaming of oil into other distillates and products.

And like, for example, food costs do involve a lot of transportation.

So it's conceivable maybe we do get some second round effects this time.

So history says we won't, but we can't be too blase about it.

Right.

And we may get it.

The other point I'd like to follow up on that, it's a good point you make, is right now we're still largely talking about this as the effect of higher oil prices.

Mm-hmm.

What you're getting at with the closure, the potential long-term closure of the Strait is, well, at some point, this may turn into a quantity story.