America's "weak spot" has been exposed.

Ask AI · Why did oil prices become the spark that tore American society apart?

The original headline, “Oil prices hold America by the throat: What America fears isn’t an economic recession, but internal division,” was first published by Le Ming, the author of “Jianwen VIP,” as a paid article for Jianwen VIP members. It is now offered as a free first look for fans; welcome to subscribe to “Jianwen VIP.”

For a long time, Americans have firmly believed in a single narrative: the shale revolution transformed the United States from an energy importer into a net exporter. From then on, the era of being “held by the throat” by Middle East oil would be gone.

The data appear to back up this claim— in 2019, the U.S. achieved energy net exports for the first time in more than 60 years; crude oil production grew by 50% over the past decade; and liquefied natural gas (LNG) export capacity expanded by one-third more than during the Russia-Ukraine conflict period of 2022.

America’s current status as an energy superpower does make it more capable of withstanding external energy supply shocks. Goldman Sachs estimates that this Iran war will cause the U.S.’ GDP growth rate this year to fall by 0.3 percentage points to 2.2%.

This aggregate number looks mild—so mild it seems almost irrelevant.

But the problem is precisely this: the mildness of the total figure masks structural agony.

America is not Saudi Arabia

The economic structure of traditional oil-producing countries such as Saudi Arabia and the UAE is highly concentrated in energy. So an increase in oil prices is almost pure upside for them.

Meanwhile, the United States has the world’s most diversified economy—oil and natural gas are not only export commodities, but also the basic fuel powering nearly every car, every airplane, and every data center.

When the Strait of Hormuz is nearly shut due to war, and oil prices surge 50% in just three weeks, America’s “energy independence” cannot shield it from the shock. Instead, it makes internal interest distribution even more torn apart.

Oil-state revelry, coastal states pick up the tab

First of all, the surge in oil prices is rewriting the United States’ economic geography.

Looking back at the previous round of oil price shocks triggered by the Russia-Ukraine conflict in 2022, most states saw their economic growth slow down, but Texas “hit the gas.” Alaska, New Mexico, and a number of fossil-fuel economies also grew against the trend.

This time, the gap may be even bigger. In recent years, the windfall profits accumulated by energy companies have been poured into expanding oil and gas production. Now, those capacities happen to be able to be released in today’s high-price window. LNG export facilities in Texas and Louisiana have been kept expanding, and are expected to grow by about another 10% by the end of the year.

So what does that mean? It means that under the same national flag, different states are experiencing sharply opposite economic fates.

Energy executives in Houston are calculating record quarterly profits, while Los Angeles commuters and small business owners in New York are bearing cost pressure caused by soaring oil prices. The already loose national cohesion under U.S. federalism is being further diluted by this economic experience of “one country, two seasons.”

Energy giants win big; everyone else loses

In addition, a clear split is also emerging across industries: after the outbreak of the war, the S&P 500 fell by nearly 4%; among 11 major sector sub-indices, 10 recorded declines—information technology fell 1%, and materials fell 10%. The only one that rose against the trend was the energy sector, up more than 4%; within that, Chevron’s single stock rose 6%.

More ironically, even the tech giants that had been riding a multi-year winning streak could not escape. As AI investment moved from the “virtual world” into the “physical world,” Microsoft, Google, and Amazon began building energy-intensive AI data centers across the United States on a large scale.

And natural gas plays a key role in all of this. More than 40% of U.S. electricity is provided by natural gas, and Goldman Sachs estimates that of the incremental electricity demand from data centers, 60% will be met by natural gas. By 2030, electricity use by data centers is expected to add an additional 3.3 billion cubic feet of natural gas demand per day. The surge in electricity costs directly threatens the economic viability of these investments.

The deepest fracture: redistribution between the poor and the rich

If the division in geography and industry is still confined to a “battle of interests,” then the redistribution effect created between rich and poor by the oil price shock reaches the very foundation of social stability.

The data show that in the United States, the lowest-income fifth of households spend nearly twice the proportion of their spending on gasoline and electricity compared with the highest-income fifth of households.

This means that the same increase in oil prices becomes a survival issue for the poor—“being forced to cut other consumption in order to maintain basic commuting and electricity use”—while for the rich it is only “paying a bit more for expenses they don’t care about much.”

Even more brutal is the closed loop of profit flows: every cent of extra “oil money” spent by low-income households passes through energy companies’ profit statements and ultimately flows into the pockets of the equity-holding class.

In the U.S., stock assets are highly concentrated among the top 20% by income. Higher oil prices are essentially a reverse transfer payment from the poor to the rich—because every cent the American public pays extra at gas stations and on electricity meters is directly converted into the profits of energy giants; then these huge profits keep flowing into the pockets of the rich who hold large amounts of financial assets through stock buybacks and dividends.

If this redistribution effect continues for several months, it will produce far-reaching social consequences. Low-income households cut consumption → retail and services revenues decline → bottom-tier jobs are lost → the situation of low-income groups worsens further—this is a classic negative feedback spiral.

This transfer will further widen the already shocking income and wealth gap in the U.S., squeezing the purchasing power of low-income groups almost to exhaustion, while allowing the wealth of the rich to not only preserve value but also increase amid inflation. This “murderous and heartless” economic deprivation is an ideal breeding ground for social unrest.

What America fears isn’t high oil prices themselves, but high oil prices being “seen” by the public every day

Oil prices have special significance for American politics because American voters don’t feel inflation in CPI reports; they feel inflation on the price boards at gas stations.

Research by Stanford scholars shows that when U.S. gasoline prices exceed $3.5 per gallon, media and public attention rises sharply.

The logic behind it isn’t complicated: rent increases are often slow and implicit; health insurance is complex and lagging; only gasoline prices are high-frequency, visible, and refresh emotions nationwide simultaneously.

This creates an almost unsolvable dilemma for Trump and the Republicans: on the one hand, they try to argue that “the U.S. is now a net exporter of energy, so higher oil prices are good for us”—which makes some sense at the macro level, but completely falls apart at the micro level.

Voters don’t care whether “the U.S. is a net exporter of energy, so the country’s books show increased gains.” They only ask: Why is it more expensive for me to fill up a tank of gas? Why is my commute more painful? Why has the cost of living risen again?

And once this anger stacks on top of America’s existing cultural and political fractures, the consequences are not just swings in approval ratings, but deeper social division: resource states feel like they are “stabilizers of the nation,” while consumer states feel they are paying the bill for someone else; blue states and red states wrap the oil price narrative as “corporate greed” and “energy independence obstructed,” respectively; and grassroots voters transform cost anxiety into an even stronger anti-establishment sentiment.

High oil prices thus turn from an economic variable into fuel for identity politics.

Conclusion: America’s “seven inches”

So, for the U.S., what is truly dangerous about long-term high oil prices is not whether there will be a recession, but how to withstand sustained high energy prices without triggering internal division.

The answer probably isn’t optimistic. The U.S. can indeed benefit from high oil prices more than in the 1970s, but the beneficiaries are highly concentrated while the harmed are extremely dispersed; profits rise quickly, while the pain sinks deeper; the GDP-level shock may not be catastrophic, but the social psychology and political consequences could be devastating.

Oil prices aren’t just holding the cost side of America’s economy—they are also holding the country’s most sensitive allocation side, the emotional side, and the vote side: they shift wealth from the consumption end to the production end, from the technology frontier to traditional fossil industries, and even more ruthlessly shift wealth from bottom-tier laborers to the financial rent-seeking class. In the process, America’s economic structure is becoming more fragmented, and social consensus is unraveling.

Ironically, the higher America’s degree of energy independence is, the more severe this internal rift may become. Because when the U.S. is both a producer and a consumer of energy, oil price fluctuations are no longer an “external shock” problem—they become a zero-sum game of domestic wealth redistribution. Winners and losers are both inside the country’s borders, so political tension has nowhere to go and cannot be externalized.

In that sense, the biggest threat high oil prices pose to America isn’t merely knocking a few points off economic growth—it’s that it makes this already divided country even harder to believe “we are experiencing the same reality.”

This is where oil prices truly hold America by the throat.