How The US Profits From Higher Energy Prices While Americans Pay More At The Pump

Today’s Letter Is Brought To You By MoonPay + Moonshot ! Memecoins are a multi-billion dollar asset class, and the infrastructure around them is maturing fast. Moonshot , now part of the Jupiter ecosystem, is one of the most widely used mobile platforms for trading them, with over two million users and direct fiat on-ramps powered by MoonPay. Fund your self-custodial wallet in seconds using a card, Apple Pay, PayPal, or bank transfer. Every transaction settles on-chain. Every asset stays in your control. Moonshot handles discovery and execution. MoonPay handles the money movement. Whether you allocate to memecoins or simply want to understand where retail attention is flowing, the infrastructure is already built. Trade Smarter With MoonPay + Moonshot To investors, Jamie Dimon, CEO of the world’s largest bank, dropped his annual letter this morning and it is filled with noteworthy comments. Most interesting to me, Dimon decided to use the letter as a vessel for reinforcing the American values, while calling for a country-wide recommitment to the ideals that built the greatest nation on earth. He writes now is “the perfect time to rededicate ourselves to the values that made this great nation of ours — freedom, liberty and opportunity. The challenges we all face are significant. The list is long but at the top are the terrible ongoing war and violence in Ukraine, the current war in Iran and the broader hostilities in the Middle East, terrorist activity and growing geopolitical tensions, importantly with China. Even in troubled times, we have confidence that America will do what it has always done — look to the values that have defined our singular nation and sustained our leadership of the free world.” This optimistic message from one of the country’s most important business leaders comes in stark contrast to the mainstream media headlines in recent weeks. Those headlines make it sound like the world is ending and a catastrophic recession is right around the corner. Oil is spiking. Bombs are dropping. The Strait is closed. Gas prices are surging. And sky high inflation will be here any day now. But a very different story emerges if you zoom out and actually look at the data. Simply, the conflict in Iran is not breaking the US economy. Instead, it is reinforcing just how dominant America has become. Let’s start with the fact that the United States is no longer an energy-dependent country. According to the EIA, America has been an energy net exporter since 2019. That is a complete reversal from decades of vulnerability. There is a wide margin between what we export compared to what we import, which is mainly driven by the pesky detail that US crude production is running at roughly 13.6 million barrels per day. This makes America the largest energy producer in the world. Now does the US still import some crude oil? Yes, but that is mostly due to edge cases related to refining efficiency and logistics. What really matters is the net position and America exports far more petroleum products than it brings in. This is important to understand because when global energy prices rise, the US counterintuitively profits at the national level from the upside of higher energy prices. This is a dramatic change from how these situations used to play out. If we go back to the 1973 oil embargo, the US was heavily dependent on foreign oil. Supply shocks led to long gas lines, soaring inflation, and a real hit to economic growth. Energy was a weakness and market commentators rightfully were worried. In the modern economy, energy is much closer to a strategic asset though. Greg Ip explains in the Wall Street Journal how this new position of leadership atop the world of energy has empowered the current administration to make geopolitical moves that were previously thought unwise or impossible: “Trump’s revamping of the U.S. role in world security and trade now extends to oil. No longer does the U.S. see itself as the guarantor of international stability and norms, but rather as a self-interested actor using control of oil to enhance its own power. The U.S. became an energy superpower through serendipity and policy. The shale revolution vastly increased domestic oil and gas production, while federal and state policy and the construction of liquefied natural gas (LNG) facilities made that output available to the world. In the process, oil and gas became key contributors to U.S. economic growth and prestige. The U.S. earns more from exports of LNG than of corn and soybeans, and twice as much as it does on movie and TV content, S&P Global reports. Fossil fuels are foundational to Trump’s vision not just of domestic prosperity but international clout. He created a National Energy Dominance Council shortly after taking office, and his National Security Strategy, issued last November, calls “American energy dominance” a “top strategic priority.”” But this is where investors really need to dig into the data. Even with tensions around the Strait of Hormuz and oil pushing above $100, the impact on the US economy looks surprisingly contained. Estimates from firms like Goldman Sachs suggest that every $10 increase in oil prices reduces US GDP growth by about 0.1 to 0.3 percentage points while adding a modest bump to inflation. That is not nothing, but it is manageable. Especially when you compare it to Europe or parts of Asia, where economies are still heavily dependent on imported energy and feel these shocks much more directly. Now let’s zoom out to the broader economy and the resilience becomes even clearer. Forecasts still call for around 2.2 percent real GDP growth in 2026. That is slightly lower than earlier expectations, but it is nowhere near recession territory. Unemployment remains in the low 4% range. Consumer spending continues to be strong and nothing in the labor market suggests catastrophe is on the horizon. Even the Federal Reserve is remaining calm and not signaling panic. The central bank’s expectation is that the conflict may nudge inflation higher, but it is unlikely to materially derail growth unless oil prices spike to extreme levels. Most Wall Street analysts view that as a low probability scenario. This brings us to a very weird second-order effect from the current geopolitical uncertainty. While everyone is focused on the short-term impact to oil, gas, and potentially inflation, the United States is gaining immense leverage on the global stage. I know it is not popular to talk about this, especially when we are still striking Iran, but it is essential to recognize what is happening so you can allocate capital appropriately for the coming years ahead. America is now one of the world’s largest exporters of LNG and refined petroleum products. That gives us real economic and geopolitical power. Many of our European allies now rely heavily on American LNG and they are increasingly tied to US supply for their own stability. Higher global prices reinforce that relationship and accelerate the shift away from less reliable or hostile energy sources. At the same time, the domestic US economy benefits from relatively abundant and cheaper energy. That matters more than people think and it is not something that is being widely covered. Manufacturing, data centers, and AI infrastructure all depend on consistent, affordable power. While other regions deal with higher input costs, the US remains better positioned to scale due to our lower sensitivity to the higher energy prices. Before I get a barrage of responses saying to “look at gas prices!” or calling me an idiot, none of this analysis means there are no downsides. Of course there are downsides. Consumers feel higher gas prices at the pump in the short term. Sentiment goes down and discretionary spending gets tighter. These microeconomic factors are not immune to realities in commodities, but at the macro level the picture is much stronger than headlines suggest. This is a classic case of macro vs micro economics. And it begs the question of what the administration is optimizing for? I don’t have that answer, but they have continued to say it is Main Street’s turn to enjoy economic abundance, because they believe Wall Street has captured enough. The problem with that statement is that you have to balance the nation’s economic health with the every day experience of American citizens who struggle to pay an extra dollar per gallon of gas each week. This is where so much of the debate gets lost in my opinion. It is very easy to write articles about the price of gas or the promised impact on higher inflation reports that are yet to surface, but those details are unlikely to drown out the macro benefits accruing to the United States. The Iran conflict is not exposing cracks in the system. It will not crash the US economy, nor will it deliver sky-high inflation similar to what we saw during COVID. Instead, the current situation is revealing just how much more resilient and dominant the American economy has become. And over a long period of time, that is a great development for Americans even if we don’t feel it on a day-to-day basis. Have a great start to your week. I will talk to everyone tomorrow. - Anthony J. Pompliano Founder & CEO, Professional Capital Management What’s Actually Happening To Bitcoin & The Economy Right Now Jordi Visser is a veteran macro investor with 30+ years of experience and the author of the VisserLabs Substack. In this conversation, we discuss market confusion amid rising oil prices, geopolitical tensions, and mixed economic signals, and why he believes we are entering a new regime defined by scarcity and structural shifts. We also explore the deflationary impact of AI, risks building in private credit, and how bitcoin could benefit as the Fed faces a difficult path between inflation and slowing growth. Podcast Sponsors Figure – True DeFi Democratized Prime to earn ~9% APY! They also have the lowest industry interest rates at 8.91% with 12 month terms! Take out a Bitcoin Backed Loan today and buy more Bitcoin. Check out Figure ! Figure Lending LLC dba Figure. Equal Opportunity Lender. NMLS 1717824. Terms and conditions apply. 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