Dr. David Bieri, Associate Professor of Public Policy at Virginia Tech, is warning the current shock to the oil supply due to the war in Iran is historic, and communities in places like Southern West Virginia could feel it more than most.
Bieri put it bluntly: “We already know that this is the largest oil disruption in history.”
Now, just over 3 weeks into Operation Epic Fury, the numbers back him up.
According to AAA, gas prices have risen more than 30%, from under $3 to nearly $4/gallon with diesel passing $5.
“We heard the Chairman say last week that the Fed currently views this as transitory, sort of a one off bump in the road. But I think that’s perhaps, as far as I’m reading it, a little euphemistic,” Bieri said.
The impact on consumers’ wallets likely won’t stop at the pump. Diesel powers freight trucks and farm equipment that move and grow the nation’s food supply, meaning higher fuel prices could bleed into groceries and everyday goods.
For rural locations like here in Southern West Virginia, it will be disproportionally felt.
“You can’t just start taking your your bicycle to work or switch to … public transit. So, no, unfortunately, it will hit this community harder than it will hit other communities who have more opportunities to switch out and do other things, particularly as it comes to transportation,” said Bieri.
Bieri says the U.S. Economy has so far proven resilient, but warns if this oil supply shock creates sustained inflation paired with slowed growth, or stagflation: “Then that’s really a horror scenario.”
His message to those feeling the pressure right now:
“Don’t lose your faith either in the spiritual or worldly way, because this is this is just the only thing that we can do, which sounds, I hope, both inspiring and not too glib.”
Doctor Bieri offered one concrete suggestion: using your tax refund to pay down high-interest debt may be one of the best steps to reduce financial pressure.
