“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“A full-throated defense of economic dynamism.” - The Wall Street Journal
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
“Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
AI Summary.The United States became a net oil exporter in late 2019, and oil and oil product spending fell from near 8% of GDP in 1980 to 3% in 2024. The authors estimate a 15% global oil supply disruption would now cut annualized U.S. real GDP growth by 0.3pp, versus 1.7pp in the rest of the world.
Lutz Kilian, Michael Plante and Alexander RichterFederal Reserve Bank of Dallas
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Kilian, et al find that the impact of an energy shock on US real GDP growth has fallen to 1/20th of what it would have been in 1980, due both to the declining share of oil in GDP and the US transition from net importer to net exporter.
How much do oil supply shocks still hurt US growth?
Core argument: A world oil supply reduction of the size seen in the 2026 Iran War would have cut annualized U.S. real GDP growth by 5.6pp in 1980 but reduces it by only 0.3pp today, one-twentieth of the 1980 decline.
The 2026 disruption of global oil supplies has been more than twice as large as the peak disruption during the 1973 oil crisis, the largest oil supply shortfall on record before 2026. It has been widely noted that the shale oil revolution has allowed the U.S. to greatly reduce its dependence on imports of crude oil and refined products. Whereas the U.S. economy had been a major net importer of oil and oil products since the 1970s, the U.S. became a net exporter in late 2019, if only by a small margin (Chart 2, panel A). In addition, oil and oil product expenditures as a share of GDP substantially declined from a high near 8% in 1980 to 3% in 2024 (Chart 2, panel B). Reduction of world oil supply [as in the 2026 Iran War] would have caused annualized U.S. real GDP growth to decline by 5.6pp in 1980; the same event today reduces growth by only 0.3pp, one-twentieth of the 1980 decline (Chart 3). Our analysis demonstrates that the US contraction in response to a geopolitical oil supply disruption was similar to that in the rest of the world in 1980. This is no longer the case. A global oil supply disruption of 15% today causes a decline in annualized real GDP growth of 1.7pp in the rest of the world, compared with only 0.3pp in the U.S.—roughly one-sixth of the response in the rest of the world.
Takeaways by Macro Roundup® AI
A world oil supply reduction of the size seen in the 2026 Iran War would have cut annualized U.S. real GDP growth by 5.6pp in 1980 but reduces it by only 0.3pp today, one-twentieth of the 1980 decline.
A 15% global oil supply disruption today lowers annualized real GDP growth by 1.7pp in the rest of the world versus 0.3pp in the U.S., roughly one-sixth of the response, whereas the contractions were similar in 1980.
The U.S. became a net exporter of oil and oil products in late 2019, by a small margin, after being a major net importer since the 1970s, and oil and oil product expenditures fell from near 8% of GDP in 1980 to 3% in 2024.
Related Articles:
Fighting Words: The Energy Transition in 2026— Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
12 Insights About Venezuela And The “Donroe Doctrine”— Petroleum supplies 90% of US transport energy consumption and about 33% of industrial production, mainly high-temperature heat and feedstocks, with passenger cars, SUVs and light trucks accounting for roughly 60% of transport energy use. The oil intensity of GDP is gradually declining in most of the world, though the US retains the highest oil intensity among major economies.
Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World— China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.
AI Summary.A ceasefire with Iran and reduced risk of extreme downside outcomes let markets compress risk premia, with US equities, high-carry and commodity currencies, and emerging markets recovering even as oil prices and yields stayed elevated. Shortages in commodities and the artificial intelligence supply chain are driving capital flows, pointing to higher volatility alongside further equity gains.
Dominic Wilson and Kamakshya TrivediGoldman Sachs
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Goldman estimates the market is now pricing US growth at 2.5%, past their own 2027 forecast of 2.2%. After the Iran-ceasefire relief rally, AI-related equities are quietly taking credit for substantial macro benefits that haven’t been delivered yet.
Are shortages in commodities and AI supply chains driving markets higher?
Core argument: The Iran ceasefire and reduced deep downside tails have let markets compress risk premia across assets, a narrowing of the distribution often associated with sharp gains amid fundamental uncertainty.
The Iran ceasefire and the reduction in deep downside tails have allowed the market to look ahead and compress risk premia across a range of assets. That type of narrowing in the distribution is often associated with sharp market gains in situations of fundamental uncertainty, and this has proved to be the case again. Despite oil prices and yields staying elevated, a broad range of assets—including US equities, high carry/commodity FX, and EM—have recovered smartly, and renewed AI optimism has pushed those exposures to new cycle highs. The common element is that shortages—in commodities and the AI supply chain—are driving capital flows. Those tensions mean that even if we avoid the worst tails, we are likely to see volatility rise alongside further equity price increases.
Takeaways by Macro Roundup® AI
The Iran ceasefire and reduced deep downside tails have let markets compress risk premia across assets, a narrowing of the distribution often associated with sharp gains amid fundamental uncertainty.
US equities, high carry/commodity FX, and emerging markets have recovered despite elevated oil prices and yields, with renewed AI optimism pushing those exposures to new cycle highs.
Shortages in commodities and the AI supply chain are driving capital flows, and those tensions point to rising volatility alongside further equity price increases even if the worst tails are avoided.
Related Articles:
Shattered Assumptions And The Energy Quandary— The author argues that energy, rather than fixed income, now serves as the true hedge to equity positions, pushing investors, companies and countries to review their energy allocations and policies. Chinese government bonds diversified equity risk when no other major bond market did, which the author attributes to China being the only major economy without a meaningful inflation problem.
Gold Heads for Longest-Ever Losing Streak on Iran War Turmoil— Gold is heading for an extended losing streak as the closure of the Strait of Hormuz and damage to Persian Gulf energy infrastructure send crude and natural gas prices surging, raising the prospect of higher interest rates from the Federal Reserve and other central banks.
Global Economics Comment: Global Economic Impacts of the War in Iran— The main economic risk to major economies from the war in Iran is that higher energy prices lift inflation and slow growth, with oil near $80/bbl, up 14% since late February. Analysts project oil moderating to $76/bbl and then $65/bbl as the risk premium fades in a structurally oversupplied market.
AI Summary.Higher oil and gas prices are projected to lower Euro Area industrial production by almost 2% by end-2027, compared with an estimated 4% drag during the 2022/23 energy crisis. The current shock is primarily an oil supply shock affecting industry broadly and is more global, leaving European energy-intensive industries less exposed to competitiveness pressures.
Niklas GarnadtGoldman Sachs
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Per GS, the current energy shock will lower Europe’s industrial production by ~2%, ½ the ~4% decline that occurred during the 2022 shock. As the current shock is global, also hitting Asia, Europe does not face the competitive disadvantage it did in 2022.
Why does the new energy price shock hurt European manufacturing less?
Core argument: Higher oil and gas prices are projected to lower Euro Area industrial production by almost 2% by end-2027 relative to a pre-conflict baseline, versus an estimated 4% drag during the 2022/23 energy crisis.
[We] project that higher oil and gas prices [will] lower Euro Area industrial production by almost 2% by end-2027 relative to our pre-conflict baseline, with negative IP growth later this year but a return to positive growth in 2027. This compares to an estimated drag of 4% during the energy crisis of 2022/23. The current price shock is expected to be smaller and less persistent, while the decoupling from Russian pipeline gas that began in 2022/23 has been sustained. The 2022/23 crisis was fundamentally driven by a sharp reduction in Russian pipeline gas supply to Europe and impacted a narrow set of highly gas-intensive industries particularly hard. The current shock is primarily an oil supply one that tends to reduce industrial production more broadly. However, in 2022/23, energy market shifts were largely focused on Europe, leading to major cost disadvantages for energy-intensive industries, particularly relative to China, and a surge in import competition. This time, energy price pressures are more global, with Asia appearing to be affected to a similar (or even greater) extent. European energy-intensive industries therefore look less exposed to competitiveness pressures.
Takeaways by Macro Roundup® AI
Higher oil and gas prices are projected to lower Euro Area industrial production by almost 2% by end-2027 relative to a pre-conflict baseline, versus an estimated 4% drag during the 2022/23 energy crisis.
The 2022/23 crisis stemmed from a sharp reduction in Russian pipeline gas supply and hit a narrow set of highly gas-intensive industries, while the present shock is primarily an oil supply shock that tends to reduce industrial production more broadly.
Energy price pressures are now more global, with Asia appearing affected to a similar or greater extent, leaving European energy-intensive industries less exposed to competitiveness pressures than in 2022/23, when cost disadvantages relative to China accompanied a surge in import competition.
Related Articles:
The Future of European Competitiveness – A Competitiveness Strategy for Europe— A European Union competitiveness report attributes the EU's labour productivity growth gap with the US largely to weaker activity in information and communications technology and large-scale digital services; excluding main ICT sectors, EU productivity was broadly at par with the US from 2000-2019. It estimates Europe's investment share must rise about 5 percentage points of GDP.
Salem’s Lot: Gulf War Update; The Purge Of Senior US Military Officers; A US Fossil Fuel Reliance Fever Dream— The US is not insulated from market effects of a Strait of Hormuz closure: while US natural gas prices have declined this year, most other hydrocarbon and refined product prices have risen materially, with US crude oil, wholesale gasoline, naphtha, shipping fuel and some petrochemical increases exceeding those in Europe and Asia.
Europe is Pricing Itself Out of Existence— Europe paid 166.3% more for its primary energy mix than it would have using conventional sources, equal to 5.6% of GDP rather than 3.37%, which the author argues largely explains minimal European growth. European Union primary energy consumption has fallen 17.47% from its peak, with renewables at 16.6% of the mix and renewable electricity priced at 5x conventional.
AI Summary.The author estimates Iran earned about $100m a day from crude sales before the war and roughly $175m a day afterward, so a US-enforced blockade would deal its economy a heavy blow. An earlier US maximum-pressure sanctions campaign cut Iranian crude earnings to no more than $10m a day without forcing Iran to yield.
Javier BlasBloomberg
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Before the war, Iran was earning ~$100mm a day from oil exports, which rose to ~$175mm during the war, before the blockade. The US “maximum pressure” campaign of 2018–2021 had reduced Iran’s oil revenue to ~$10mm a day without changing Tehran’s behavior.
Would cutting off oil revenue force Iran to negotiate?
Core argument: Iran's crude sales earned roughly $100 million a day before the war and have risen to about $175 million a day since Feb. 27, by the author's back-of-the-envelope calculations.
According to my back-of-the-envelope calculations, Iran was making about $100 million a day selling its crude before the war. Since Feb. 27, that’s risen to around $175 million a day. If the US enforces the blockade, the Iranian economy will suffer an enormous blow on top of the war destruction. But whether that economic hit translates into a softer negotiation approach remains to be seen. Targeting Iranian oil revenue has been tried before — and it failed. In 2020-2021, when Trump launched a maximum pressure campaign of sanctions, Iranian crude exports dropped to fewer than 250,000 daily barrels for several months just as oil prices were depressed due to the impact of the pandemic. Even allowing for some exports slipping under the radar, Iran was earning no more than $10 million a day selling crude — and it still didn’t buckle.
Takeaways by Macro Roundup® AI
Iran's crude sales earned roughly $100 million a day before the war and have risen to about $175 million a day since Feb. 27, by the author's back-of-the-envelope calculations.
Under Trump's 2020-2021 maximum pressure sanctions campaign, Iranian crude exports fell below 250,000 barrels a day for several months and revenue reached no more than $10 million a day, yet Iran did not buckle.
US enforcement of the Hormuz blockade would deal the Iranian economy an enormous blow on top of war destruction, though whether that translates into a softer negotiating approach remains to be seen.
Related Articles:
Are We Running Out Of Oil— An analysis of country- and product-specific oil markets identifies pockets of potential extreme tightness if the Strait of Hormuz remains effectively closed, with critically low supplies of the petrochemical feedstocks naphtha and liquefied petroleum gas in Asia and cross-product scarcity in multiple Asian countries.
Salem’s Lot: Gulf War Update; The Purge Of Senior US Military Officers; A US Fossil Fuel Reliance Fever Dream— The US is not insulated from market effects of a Strait of Hormuz closure: while US natural gas prices have declined this year, most other hydrocarbon and refined product prices have risen materially, with US crude oil, wholesale gasoline, naphtha, shipping fuel and some petrochemical increases exceeding those in Europe and Asia.
Shattered Assumptions And The Energy Quandary— The author argues that energy, rather than fixed income, now serves as the true hedge to equity positions, pushing investors, companies and countries to review their energy allocations and policies. Chinese government bonds diversified equity risk when no other major bond market did, which the author attributes to China being the only major economy without a meaningful inflation problem.
AI Summary.U.S. crude oil production rose 3%, or 350,000 barrels per day, to an annual record of 13.6m barrels per day, with the Lower 48 states excluding the Gulf accounting for 83% of output. Active rigs fell 5% and wells drilled fell 1% as West Texas Intermediate prices dropped from $77 to $65 a barrel, but efficiency gains still lifted production.
Naser AmeenEnergy Information Administration
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American crude production expanded 3% in 2025 to a new record of 13.6mm bpd. The rig count fell 5% in the lower 48 states as productivity improved.
Did US crude output hit a record despite fewer rigs?
Core argument: U.S. crude oil production rose 3%, or 350,000 b/d, in 2025 to an annual record of 13.6 million b/d, with the Lower 48 excluding the Gulf of America supplying 11.3 million b/d, or 83% of the total.
U.S. crude oil production grew by 3%, or 350,000 barrels per day (b/d), in 2025, setting a new annual production record of 13.6 million b/d. Production from the Lower 48 states excluding the Gulf of America (L48) accounted for 11.3 million b/d, or 83% of the total U.S. crude oil production in 2025. The rest of the production came from Federal Gulf of America (GOA) and Alaska. In 2025, the number of active rigs per month in L48 was 5% less than in 2024 and 1% fewer wells were drilled. Despite less rig activity and fewer wells, efficiency improvements that we saw in 2024 continued through 2025 and resulted in a slight increase in crude oil production, with new wells producing 2.9 million b/d of crude oil and wells drilled prior to 2025 producing 8.3 million b/d. Rig and well activity fell in 2025 compared with 2024 because West Texas Intermediate (WTI) crude oil prices fell from $77/barrel (b) in 2024 to $65/b in 2025.
Takeaways by Macro Roundup® AI
U.S. crude oil production rose 3%, or 350,000 b/d, in 2025 to an annual record of 13.6 million b/d, with the Lower 48 excluding the Gulf of America supplying 11.3 million b/d, or 83% of the total.
Active rigs per month in the Lower 48 excluding the Gulf of America fell 5% in 2025 versus 2024 and 1% fewer wells were drilled, as West Texas Intermediate prices dropped from $77 per barrel to $65 per barrel.
Efficiency improvements continuing from 2024 resulted in a slight increase in U.S. crude oil output in 2025 despite reduced drilling, with new wells producing 2.9 million b/d and wells drilled before 2025 producing 8.3 million b/d.
Related Articles:
Fighting Words: The Energy Transition in 2026— Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World— China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.
AI is Changing Oil Country—and Pumping Up Profits— The U.S. produces 60% more oil per day with 40% fewer workers than a decade ago, with annual productivity gains roughly 7x those of the average U.S. business. In the Permian, the break-even oil price has fallen to $40 a barrel from over $90, and AI tools that predict the most productive drilling locations should push it lower.
AI Summary.Estimates based on primary energy overstate how much electricity is needed to replace oil in passenger cars, since electric motors convert 80%-90% of electricity into motion versus about 18% for gasoline cars. Measuring useful final energy net of waste heat avoids this "primary energy fallacy": the US consumed 45 exajoules of useful final energy versus 95 exajoules of primary energy.
Michael CembalestJ.P. Morgan
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As measured by useful final energy consumption in 2024, nuclear provided 6% of America’s 44.5 exajoules, renewables 9%, and fossil fuels 85%. The corresponding numbers for China’s 87.7 exajoules were nuclear 2%, renewables 13%, and fossil fuels 85%. Coal was 54% of China’s consumption and oil 18%, relative to 8% and 30%, respectively for the US.
Does measuring primary energy overstate the electricity needed to replace oil?
Core argument: The U.S. consumed 45 exajoules of useful final energy in 2024 compared with 95 exajoules of primary energy.
Energy is lost as waste heat in conversion of fuel energy to motion in internal combustion engines, and in conversion of heat to electricity. For example, if you use primary energy to estimate how much electric power is needed to replace oil in passenger cars, you would overestimate the power needed since electric motors are 80%-90% efficient at converting electricity to motion compared to 18% efficiency for gasoline cars. A better approach [is estimating] the energy net of waste heat that is actually consumed by end-users; this would help avoid overly high projections of fossil fuel demand in a more electrified world due to this “primary energy fallacy.” A few years ago I constructed a measure of useful final energy (UFE) that I use for my energy charts. With this approach, we can get closer to useful final energy actually consumed by end users. [For example the US consumed 45 exajoules (EJ) of useful final energy in 2024 compared to 95 EJ of primary energy.]
Takeaways by Macro Roundup® AI
The U.S. consumed 45 exajoules of useful final energy in 2024 compared with 95 exajoules of primary energy.
Electric motors convert electricity to motion at 80%–90% efficiency compared with 18% for gasoline cars, so using primary energy to size the electricity needed to replace oil in passenger cars overestimates the requirement.
Measuring energy net of waste heat that end-users actually consume helps avoid the "primary energy fallacy" of overly high projections of fossil fuel demand in a more electrified world.
Related Articles:
New U.S. Electric Generating Capacity Expected To Reach A Record High in 2026— U.S. power plant developers plan to add 86 gigawatts of new utility-scale generating capacity, which would be a record if realized, with solar at 51% of planned additions, battery storage at 28% and wind at 14%. The prior year saw 53 gigawatts added, the largest single-year installation since 2002.
Electricity 2026— Global electricity demand is projected to grow faster than the world economy throughout the forecast period, driven by electricity-intensive industries, air conditioning, data centres and continued electrification. US electricity demand is forecast to rise about 2% a year over 2026-2030, more than twice the past decade's rate, with data centres accounting for almost half that growth.
Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World— China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.
AI Summary.U.S. power plant developers plan to add 86 gigawatts of new utility-scale generating capacity, which would be a record if realized, with solar at 51% of planned additions, battery storage at 28% and wind at 14%. The prior year saw 53 gigawatts added, the largest single-year installation since 2002.
EIA StaffEnergy Information Administration
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The US will add 86GW of new utility-scale electrical generation capacity to the power grid in 2026, a record high. Solar will make up 51% of the planned 2026 capacity additions, followed by battery storage at 28% and wind at 14%.
Is U.S. new generating capacity headed for a record high?
Core argument: U.S. power plant developers and operators plan to add 86 GW of new utility-scale generating capacity in 2026, a record if realized, according to the Preliminary Monthly Electric Generator Inventory report.
U.S. power plant developers and operators plan to add 86 gigawatts (GW) of new utility-scale electric generating capacity to the U.S. power grid in 2026 in our latest Preliminary Monthly Electric Generator Inventory report, a record if realized. Solar power makes up 51% of the planned 2026 capacity additions, followed by battery storage at 28% and wind at 14%. In 2025, 53 GW of new capacity was added to the grid, the largest capacity installation in a single year since 2002.
Takeaways by Macro Roundup® AI
U.S. power plant developers and operators plan to add 86 GW of new utility-scale generating capacity in 2026, a record if realized, according to the Preliminary Monthly Electric Generator Inventory report.
Solar power accounts for 51% of planned 2026 U.S. capacity additions, followed by battery storage at 28% and wind at 14%.
The U.S. grid added 53 GW of new capacity in 2025, the largest single-year installation since 2002.
Related Articles:
Electricity 2026— Global electricity demand is projected to grow faster than the world economy throughout the forecast period, driven by electricity-intensive industries, air conditioning, data centres and continued electrification. US electricity demand is forecast to rise about 2% a year over 2026-2030, more than twice the past decade's rate, with data centres accounting for almost half that growth.
Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World— China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.
China’s AI Power Play: Cheap Electricity From World’s Biggest Grid— China generates more than twice as much electricity as the US, and Goldman Sachs projects it will have roughly 400 gigawatts of spare capacity by 2030 — about 3x expected global data-center power demand. Morgan Stanley forecasts US data centers could face a 44-gigawatt electricity shortfall within three years.
AI Summary.Petroleum supplies 90% of US transport energy consumption and about 33% of industrial production, mainly high-temperature heat and feedstocks, with passenger cars, SUVs and light trucks accounting for roughly 60% of transport energy use. The oil intensity of GDP is gradually declining in most of the world, though the US retains the highest oil intensity among major economies.
Michael CembalestJ.P. Morgan
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The oil intensity of US GDP declined 52% btw 1990 and 2024, but remains almost twice that of Germany and France. As of 2023, 90% of energy consumption for American transport and 33% for industrial production was petroleum-based.
How reliant is the US economy on petroleum?
Core argument: Petroleum supplies 90% of US transport energy consumption and about 33% of industrial production, mostly high-temperature heat and industrial feedstocks, while accounting for less than 10% of residential and commercial heating totals.
The US is still highly reliant on petroleum for 90% of transport energy consumption with the remainder mostly made up of natural gas and biomass, and for ~33% of industrial production (mostly high temperature heat and industrial feedstocks). The amounts of oil used for residential and commercial heating is pretty negligible, less than 10% of the respective totals. Note: passenger cars, SUVs and light trucks represent around ~60% of transport energy consumption, with the remainder mostly split between heavy class 8 trucks, air travel and maritime. The oil intensity of GDP is gradually declining in most of the world. At some point, this ratio may drop low enough that disruptions in oil supplies will be less of an issue for growth and consumer spending. I just have no idea what that level would be. Also: the US still has the highest oil intensity of GDP of countries in the chart. The September 2025 expiration of US EV subsidies makes it unlikely that the US will converge further to the rest of the group; Ford throwing in the towel on the F150 Lightning is another sign of the times in the US regarding electrification of transport.
Takeaways by Macro Roundup® AI
Petroleum supplies 90% of US transport energy consumption and about 33% of industrial production, mostly high-temperature heat and industrial feedstocks, while accounting for less than 10% of residential and commercial heating totals.
Passenger cars, SUVs and light trucks account for roughly 60% of US transport energy consumption, with the remainder split mostly between heavy class 8 trucks, air travel and maritime.
The US has the highest oil intensity of GDP among the countries charted, and the September 2025 expiration of US EV subsidies makes further convergence toward the rest of the group unlikely.
Related Articles:
Power Politics: Energy Self-Sufficiency in a Modern Mercantilist World— China leads in adding power to the grid, with more than 30,000 miles of ultra-high-voltage transmission lines versus zero in the US and lead times for large transformers of 48 weeks against a US average of 143 weeks. This positions China to accommodate new demand sources such as artificial intelligence.
Heliocentrism— An energy use must be electrified before green grid electricity can decarbonize it, and while US grid decarbonization continues at a steady pace, the electricity share of final US energy consumption has grown little. Transmission line growth runs well below Department of Energy targets for 2030 and 2035, and transformer delivery times have stretched from 4–6 weeks to 2–3 years.
Economic Growth Now Depends on Electricity, Not Oil— Average annual electricity load growth reached 3% and is projected to continue at that rate for five years, with utilities raising expected peak demand for 2029 by 12%, or 101 gigawatts, driven by data centers, new factories, electric vehicles, heat pumps, and hydrogen production.
