The U.S. economy may be better prepared than China’s to handle any disruptions in energy supplies caused by the recent attacks on Saudi oil facilities, according to David Harrison at The Wall Street Journal. He writes:
Where surging oil prices would do the most damage is in countries that rely on energy imports, such as China and Japan, the world’s second- and third-largest economies after the U.S.
China produces roughly 4.8 million barrels of oil a day but consumes about 12.8 million, according to the EIA, which makes it heavily dependent on oil imports.
China’s economy has already been under strain from the trade war with the U.S. and a broad global growth slowdown. Higher prices could cause it to slow further, which would reduce Chinese demand for U.S. exports.
The International Monetary Fund said in July a sharp deceleration of trade was slowing the global economy more than it expected. It forecast that global growth, adjusted for inflation, would fall to 3.2% this year, from 3.6% last year and 3.8% in 2017.
The U.S. has so far been spared some of the more serious consequences of the global slowdown. The domestic economy grew at a respectable 2% seasonally adjusted annual rate in the second quarter and Macroeconomic Advisers, a forecasting firm, expects growth will moderate slightly to a 1.9% pace in the third quarter.
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