The oil shock is causing a $45 billion rupture in the economy

The largest oil disruption in history is widening a divide in the economy.

- David Uberti

Surging prices at the pump are eating an outsize share of low- and middle-income consumers' salaries.

(AFP)

Americans have cumulatively spent about $45 billion more on gasoline and diesel during the war with Iran than they did during the same period a year ago, according to an analysis of OPIS pricing data and federal demand figures.

The surging costs are eating an outsize share of low- and middle-income consumers’ paychecks, darkening their outlook relative to the well-off.

At the same time, investors in oil-and-gas companies are watching their portfolios swell. Big energy returns bolstered a blockbuster corporate-earnings season and added momentum to the artificial-intelligence-led rally that has pushed the stock market to records. While higher inflation and borrowing costs have added stress on less-affluent Americans, many economists believe high earners will continue powering the U.S. ahead.

President Trump campaigned on cutting Americans’ energy costs in half. Now, as higher prices contribute to sagging poll numbers and some of the lowest consumer-sentiment readings on record, he has argued that the oil shock is benefiting the energy-rich U.S. in the form of record exports.

“The question is, of course, who is the U.S.?” said Isabella Weber, an economics professor at the University of Massachusetts, Amherst. “If we look at the different income groups in the United States, it's really the richest of the rich who benefit from this. The majority of people hardly have any benefit from it and are in fact carrying a much larger cost burden.”