Oil prices and war in the Middle East
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What factors are causing the recent spike in oil prices?
As oil prices rise, countries may turn to reserves. From Marketplace, I'm Sabri Beneshour, in for David Brancaccio. Oil prices came close to hitting $120 a barrel yesterday. This morning, they've come back down a little, but they are still just above $100 a barrel. Gas prices have also wasted no time in rising. The average price of a gallon of regular gasoline is now $3.25 a barrel. A gallon, according to AAA, up 27 cents in a week. Julia Coronado is here to talk about it. She's founder and president of Macro Policy Perspectives and a professor at the University of Texas, Austin. Hi, Julia. Good morning. So oil prices went a little nuts. In a Truth Social post yesterday, President Trump said that $100 a barrel of oil, at least short term, is a very small price to pay.
Is that a small price to pay? For the average consumer, it's going to mean substantially higher gasoline prices.
How are rising oil prices affecting consumer spending?
And so that's something most people have to buy every week. And that is going to crimp the rest of their budget, the purchasing power for other things. And so it really depends on how important getting around is to you. But for a lot of people, it's going to be a pretty big bite. How much might this add to overall inflation and potentially drag down economic growth? One reason I ask is because some folks are making the argument that, you know, the U.S. economy isn't as oil sensitive as it used to be. Maybe this won't be so bad. What do you think? For consumers, if there's a substantial rise in gasoline prices, we do tend to see an effect on consumer spending. And I think certainly the oil prices we're looking at right now reach that threshold.
So we would expect to see some hit to consumer spending just from the budget bite that higher gas prices bring. Julia Coronado is founder and president of Macro Policy Perspectives. Thank you, as always. My pleasure.
What actions are countries considering in response to high oil prices?
In response to surging oil and gas prices, Canada, France, Germany, Italy, Japan, the UK, and the U.S. are having an emergency meeting this morning to talk about possibly releasing oil reserves from their strategic stockpiles to soften this oil price spike. Marketplace's Nancy Marshall-Genzer has more. Any release of stockpiled oil would be coordinated by the International Energy Agency, which works to ensure steady oil supplies during energy shocks. The idea is to increase the supply and pressure oil prices down. The Financial Times reports that some U.S. officials are talking about a coordinated release of 300 to 400 million barrels of oil. That would be 25 to 30 percent of the total oil reserve.
There have been five collective oil releases since the International Energy Agency was founded in 1974 in response to the Arab oil embargo. The last two releases were meant to tamp down prices after Russia's invasion of Ukraine. In a social media post yesterday, President Trump said short-term oil prices were a very small price to pay for, quote, world safety and peace. I'm Nancy Marshall-Genzer for Marketplace.
Heads up, some of the descriptions in the next story are kind of gross. We're going to hear about a flesh-eating parasite. The New World Screwworm has been eradicated from the U.S.
What is the significance of releasing oil reserves?
for some 60-plus years, but in recent months, it has been detected as close as 70 miles from the U.S.-Mexico border, and it has been causing some serious concern across the state of Texas for what it could mean for the cattle industry. Carlos Morales reports. As a kid growing up in far west Texas, Joe Williams would have to look over the family's livestock to make sure they weren't infected with screwworm larvae. If you come up on one that has been fly struck, you know it immediately. You can smell it. At the time, the New World screwworm was a common and devastating reality of ranching. The parasite's named for the way its larvae dig, or screw, into the living flesh of warm-blooded animals, causing nasty, painful lesions.
It's putrid. I mean, super putrid. While the days of monitoring livestock and treating them for screwworm have been over for decades now, a possible return is making folks in the cattle industry anxious.
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Chapters
6 chapters
1
What factors are causing the recent spike in oil prices?
0:01–0:59
2
How are rising oil prices affecting consumer spending?
0:59–2:03
3
What actions are countries considering in response to high oil prices?
2:03–3:37
4
What is the significance of releasing oil reserves?
3:37–5:00
5
What is the threat posed by the New World Screwworm to the cattle industry?
5:00–6:06
6
How is the U.S. addressing the potential return of the New World Screwworm?
6:06–6:23