Justin Wolfers
Professor of economics and public policy at the University of Michigan, a non-resident senior fellow at the Brookings Institution, and author of a widely used i...
“The United States on average didn't get poorer and didn't get richer. But people with cars got poorer and people with shares got richer. It's really just a redistribution.”
Platypus Economics with Justin Wolfers · Money & Markets · October 2026
Wolfers was asked who comes out ahead from high oil prices during the disruption in the Strait of Hormuz. Because US producers can always sell abroad at the world price, drivers pay more at the pump, while a roughly energy-neutral country as a whole breaks even.
Transcript
…could do that. That could have reduced the dependence. You know, there used to be an election slogan. Both sides would talk about reducing dependence on foreign oil. That became very unfashionable in the last couple of years. But renewables obviously are much less affected by what's going on.
…and other routes that have come into play to get around the disruption in the Strait of Hormuz. Are there people who are, or I guess, who is coming out ahead in this? Are American oil producers doing better, or is this just such a level of disruption that we don't really think about it like that?
No, so this is fantastic for American oil producers. So let me go back because it'll help answer a question that I think puzzles lots of people. I said earlier the U.S. is actually a net exporter of energy. For our purposes, let's just say it's roughly energy neutral. We produce about as much energy as we need. If that's the case, why do we care about what's going on in the rest of the world? Why do our lives feel so disrupted given that we're in a continent surrounded by water, Canadians, and Mexicans? And we produce as much as we consume. And the answer is as follows: which is American producers always have the right to sell their oil elsewhere. By the way, I think that's a good thing. If you can sell your oil at $100 a barrel to folks abroad and there's someone domestically who wants to buy it for $70 a barrel, the person domestically doesn't need it that much. Otherwise, they'd say they're willing to pay $100. And so it's better to get $100 of revenue…
buy gas here. They do. Taxes. There's lots of cars.
I'm in Michigan. We have more cars. But what it does mean is there's more money going to the folks who sell the gas. And that's basically the oil refineries and the big oil companies. They're pulling out of the ground roughly the same amount of oil, maybe a little bit more, and they're getting…
Do you think it would be a beneficial policy if people were to be invested in the stock market like that in general? Would that I can imagine that there would be some adverse effects as well.
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