How Middle-East Chaos Will Raise Your Cost Of Living

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by Daniel Carter
Let’s be honest, the Middle-East has been a complete disaster for longer than most of us can imagine. Once the US firmly planted itself in the Middle-East in 2001, the destabilization of an already volatile region really started to pick up steam. With five out of the top 10 oil producing countries located in the Middle-East, sometimes these conflicts can have extremely negative consequences for oil consumers (pretty much everyone).
The price of almost every product on the market increases as the price of oil goes up. When the price of oil goes up, it costs more for companies to transport goods to your local stores, and they are more than willing to pass those costs on to the consumers. Obviously, it will also cost you a lot more to get to and from work. Surging oil prices will most certainly guarantee that your cost of living surges as well.
During the oil embargo and Iran-Iraq war of the 1970’s, oil prices skyrocketed. This created a crisis in the Western world as inflation ran rampant and economic growth stagnated (I.e. stagflation). A seemingly isolated conflict in the Middle-East led to wide-spread, catastrophic consequences in the rest of the world.   

We also saw a surge in oil prices during both the Gulf War and the US invasion of the Middle-East in the early 2000’s. Ordinary consumers were stuck with the pain of astronomical oil prices until a large oversupply crashed the oil market in 2014. Unfortunately, the situation in the Middle-East is not cooling off. In fact, it is very close to getting dangerously out of control.
There have been so many ominous developments in the Middle-East this year that it is becoming hard to keep track. Saudi Arabia surprised the world by purging many of its powerful leaders last month. The Saudis have also been fighting a proxy war against Iran in Yemen. They are also looking to start a fight with Qatar unless Qatar bends to their demands. Iraq is becoming more destabilized by the day and is now struggling to fight off the Kurds and ISIS. War also continues to rage in Syria, with the US and Russia getting closer to going to war in the region. Israel, Turkey and Iran have also involved themselves in the Syrian war. Needless to say, it is a complete mess, and it’s only getting worse.
The massive power vacuum in the Middle-East has pulled in a plethora of countries looking to take control of the region. On one side, there is the US, Saudi Arabia, Israel, the Kurds and a few other allies. On the other side, there is Russia, China, Iran, Syria, Turkey and others. It is no mystery what these two sides are after. The Middle-East is full of natural resources, and the current destabilized climate is begging for a powerful nation (or nations) to come in and take control.
All of these relatively small conflicts could very possibly turn in to the largest conflict we have ever seen in the Middle-East. If it happens before the transition to renewable energy (it most likely would), oil prices would surge to levels that would make the energy crisis of the 1970’s pale in comparison. It would be worth keeping a close eye on the Middle-East developments to determine how the quality of your life may change. If total war does break out, quickly invest in oil.

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2 thoughts on “How Middle-East Chaos Will Raise Your Cost Of Living

  1. False equivalence. As you should well know, we are now producing 80% of our own consumption and thus helping to stabilize oil prices.

    • The US would still have to raise prices if there were shortages in the middle east. The two markets are not mutually exclusive. Just look at how correlated WTI oil (US market) and Brent oil (world market) are.

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