A new drill for oil money

Disruptive as they might have been, oil shocks of the past have all had a silver lining for some: a significant portion of the revenue windfall accruing to oil producers – especially those in the Middle East – has been recycled back into dollar-denominated assets.

In earlier oil shocks (or energy crisis: any great shortfall or price rise in the supply of energy to an economy), the flows associated with these “petro-dollars” have been sizable enough to have

contained the damage to US interest rates and to the interest-rate-sensitive components of the US economy.

Asia Times