Brent up 40%, Hormuz closed — but oil intensity has more than halved since 1973.
Brent up 40%, Hormuz closed — everyone is drawing 1970s analogies. But in 1973 it took 1 barrel per $1,000 of GDP; today, 0.43. PPI came in double expectations. Powell said "we don't know" 17 times.
The same price shock does damage of a different magnitude today. But the second-round effects (energy → producer → consumer prices) haven't fully shown up yet.
"The 1970s is the wrong analogy — but that doesn't mean this is painless." — Gita Gopinath, IMF