Military conflict and geopolitical tensions in the Middle East tend to be associated with disruptions in the global supply of oil. These disruptions can raise both the level and the volatility of the price of oil. And rising oil prices have many direct and indirect macroeconomic effects.

• Oil is an important intermediate input in the production of goods—plastics, for example. So, increases in the price of oil can lead to increases in the prices of other final goods.
• Many households rely directly on gasoline for daily activities, such as commuting to work and visiting family.
• Households and businesses also rely on oil indirectly for electricity consumption.

Another channel through which oil prices may have macroeconomic effects is related to a country’s status as a net importer or exporter of this commodity: A rise in oil prices tends to harm net importers while benefiting net exporters. Is the US a net importer or a net exporter of oil?

Our FRED graph above helps us answer that question by displaying the time series of net exports of petroleum-related products for the US as a share of GDP. From 1985 (when data are first available) through 2020, the US was a net importer of oil. The series was negative during that period. The series became positive around 2020, indicating that the US became a net exporter. This change is primarily explained by rising exports of refined petroleum products, such as gasoline and jet fuel.

Our second FRED graph, below, displays imports and exports of petroleum and its related products separately, both divided by nominal GDP. This graph helps rationalize some of the trends that underlie the first graph: Imports of petroleum products as a share of GDP rose throughout the 1990s and 2000s. But this ratio has fallen, suggesting the US economy has become less dependent on oil. At the same time, technological improvements, such as the development of the shale oil industry, have led to an increase in the importance of petroleum exports as a share of GDP. It’s also worth noting that not all types of oil are identical: Different grades of oil have different uses, and the US economy tends to import crude oil while exporting refined petroleum products.

While an increase in the price of oil could benefit at least some sectors of the US economy, the fact that oil is a commodity with globally determined prices means that domestic consumers still pay more when supply disruptions occur and prices rise.

How these graphs were created: First graph: Search FRED for “exports of petroleum” (FRED series ID LA0000061Q027SBEA) and click on “Edit Graph.” Search for “imports of petroleum” (FRED series ID B648RC1Q027SBEA) and then “nominal GDP” (GDP). Apply formula (a-b)/c. Second graph: Repeat the above process for exports and GDP with formula a/b, then open the “Add Line” tab and repeat with imports and GDP.

Suggested by Miguel Faria-e-Castro.