Crude oil prices climbed back above $100 a barrel this week, briefly touching nearly $110 on Monday before easing to around $107 on Tuesday, a roughly 4% move that has revived talk of the kind of oil shock that rattled the economy decades ago. Even so, economists say the milestone carries far less weight than it once did.
The rise has already shown up at the pump. Regular gasoline is averaging $4.43 a gallon nationally, up from $3.20 a year ago, according to AAA. Diesel has climbed to a record $6.39 a gallon, up from $3.70 a year earlier, a jump that adds directly to the cost of shipping goods across the country.
Economists including Michael Pearce, chief U.S. economist at Oxford Economics, note that oil's grip on the broader economy has loosened considerably since the early 1980s. Back then, households spent about 6% of their income on gasoline. Today that figure is closer to 2.5%. Some estimates suggest oil would need to climb toward $200 a barrel to inflict the kind of economic damage $100 oil caused in 1980.
The U.S. has also become a net energy exporter rather than a dependent importer, and analysts point out that refining capacity, not just the price of crude itself, increasingly determines what drivers actually pay at the pump. Patrick De Haan, head of petroleum analysis at GasBuddy, and analysts at JPMorgan have both pointed to these structural shifts as reasons the current run up looks less threatening than past oil shocks.
The bigger concern, economists say, is less about the price of crude itself and more about elevated gasoline and diesel prices squeezing consumers and businesses directly, with lower income households facing the sharpest pressure since fuel costs eat up a larger share of their budgets.
If prices hold near current levels, economists expect the drag on consumer spending growth to amount to a few tenths of a percentage point. That damage would grow significantly worse if oil were to climb toward $140 a barrel.