Oil Shocks and Ordinary People: A New Zealand–United States Comparison

There is doubt when the price of oil goes up for whatever reason we the consumer, the last link in the chain, feel the effect on our wallet. In New Zealand, where we once paid under $2 per litre of petrol now the average cost is less than $3 per litre. Whenever the price of petrol increases it affects every part of the economy. Food prices jump; they are what every person on the planet will notice. Some will see no change, others will experience small increases, others will grumble and adjust their budget or just buy less. Oil is what makes the world go round, our lives are impacted by the cost of it.

Oil Shocks

Oil shocks have shaped the economic experiences of both New Zealand and the United States, but their impacts differ sharply because of each country’s size, energy systems, and economic structure. New Zealand’s past, particularly the oil crises of the 1970s, reveals how vulnerable a small, import‑dependent our nation is. The United States, by contrast, has historically been both a major consumer and producer of oil, giving its citizens a different mix of exposure and insulation.

New Zealand

New Zealand’s experience with earlier oil shocks was severe. The OPEC embargo and the Iranian Revolution sent fuel prices soaring, triggering rationing, car‑free days, and widespread inflation. As a small open economy with no large domestic oil reserves, New Zealand absorbed global price increases immediately. Transport costs rose sharply, pushing up the price of food, building materials, and imported goods.

Ukraine & Venezuela

The Treasury and Reserve Bank continue to note that geopolitical disruptions, such as Russia’s invasion of Ukraine, still hit New Zealand hard by raising shipping costs, commodity prices, and inflation across the economy. For ordinary New Zealanders, especially in rural regions, higher fuel prices translate directly into more expensive commutes, higher supermarket bills, and increased pressure on household budgets.

The despicable intrusion, a military operation, in Venezuela by USA forces is an action by an errant, unlawful nation. Whatever President Trump calls it, or excuses it, it is nothing but an invasion, to control the flow of oil back to the USA. An invasion condemned by commentators in many organisations and nations all over the planet as violation of international law and sovereignty. This is an action of an autocratic leader who has lost the trust of the international community. How it will affect the price of oil for the men and women who work for themselves, and their families is yet unknown. More than likely the cost of living will increase.

USA

The United States faces oil shocks differently. As one of the world’s largest oil producers, the U.S. has a degree of insulation New Zealand lacks. When global prices rise, American consumers still feel the pain at the pump, but the domestic industry often benefits from higher revenues. This creates a mixed impact: fuel‑dependent households, especially low‑income families and rural drivers, face higher costs, while oil‑producing regions such as Texas or North Dakota may experience job growth and increased investment. The scale of the U.S. economy also dampens the inflationary effects of oil shocks; while prices rise, the country’s diversified industrial base and domestic refining capacity prevent the kind of across‑the‑board inflation spikes that New Zealand experiences.

Geopolitical Impact

A geopolitical crisis such as a U.S. military intervention in Venezuela would therefore affect the two countries differently. For New Zealand, any disruption to Venezuelan exports would tighten global supply and raise crude prices, feeding directly into higher transport costs, shipping costs, and inflation. As the Reserve Bank notes, geopolitical shocks that raise commodity prices or disrupt maritime trade routes have “pronounced impacts on small open economies like New Zealand”. Even without direct trade links to Venezuela, New Zealanders would feel the effects through higher petrol prices and more expensive imports.

For Americans, the consequences would be more complex. On one hand, U.S. consumers would face higher fuel prices, especially if global markets reacted sharply to instability in a major oil‑producing nation. On the other hand, U.S. oil companies could benefit from reduced competition and higher global prices, potentially boosting domestic production and employment. The economic pain would be uneven: urban households with access to public transport might cope better, while suburban and rural Americans, who rely heavily on cars would feel the strain more acutely. Political divisions could deepen as different regions experience the shock in opposite ways.

Summary

Ultimately, oil shocks expose a fundamental contrast between the two nations. New Zealand, heavily dependent on imported fuel and global shipping, experiences oil‑driven inflation quickly and broadly. The United States, with its vast domestic energy sector, faces more uneven but often less severe nationwide consequences. Yet for ordinary citizens in both countries, the story is familiar: geopolitical turmoil in distant places can raise living costs, unsettle economies, and remind households how deeply their daily lives are tied to the global flow of oil.

What is clear is that the United States under its current President is a nation not to be trusted. Actions taken against Venezuela, all in the name of oil, demonstrate it clearly for all the world to see.