What’s the best way to think about oil & gas shocks by country during the Iran war?

J.P. Morgan Asset Management

Michael Cembalest

Article

3 Pages

Michael Cembalest says when we think about the oil & gas shock affecting different countries, we focus on total oil consumption (irrespective of domestic oil production since oil is a global market) and imported gas (since domestic production is typically shielded from price shocks).

Key Takeaways

Oil Is Global: Oil consumption matters more than domestic output because crude and refined products absorb price shocks across countries.
Gas Is Local: China gets 54% of useful final energy from coal, helping explain why it screens less exposed.
Imports Drive Vulnerability: Imported gas rather than domestic gas is the better signal for which countries face the sharpest pressure.
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