Higher Oil Prices: Confused Mercantilism or Geopolitical Games? - Econ Lessons

[TexasTowelie]

A phantom menace effect, where geopolitical signaling increases oil prices through uncertainty. - My name is Mark Biernat, and I study economics. This is my claim: Risk and uncertainty are conscious or unconscious economic side effects of US action.

Oil prices are back above $60 per barrel, driven not by immediate supply shortages but by a growing geopolitical risk premium. In this video, I analyze how tensions involving Iran, Venezuela, and U.S. foreign policy affect global oil markets, and why higher oil prices matter more to Russia’s war economy than the fate of marginal producers.

Using clear data, I compare Iran’s role in global oil supply in the 1970s with its role today, explain why Venezuela contributes only about 1% of global oil production, and show how China and India now dominate purchases of Russian crude oil, with Türkiye playing a key role in refined fuel exports.

The video evaluates three explanations for recent policy moves:

• A phantom menace effect, where geopolitical signaling increases oil prices through uncertainty
• Economic nationalism and flawed assumptions about resource extraction and geopolitics
• Genuine democracy promotion, despite higher energy costs

I then connect oil prices directly to Russia’s ability to finance war, explaining why price levels matter more than political theater.

This video focuses on data, incentives, and outcomes, not slogans.