Oil prices being on the rise has been one of the most heated topics in America since the 2020 Presidential Election. The current administration's favorite talking point is that this is all Russia's fault, and that America is producing more oil than ever. According to statistical data, however, this is far from true. In fact, America is producing less new oil than in the past 50 years. What the Biden admin counts as "production" is going into America's oil reserves, and in issuing new oil rights to barren lands. The oil industry is speaking up about the President misleading people, but good luck finding a media channel that will carry that news. The bottom line is that expenses in America are about to go way up. Which expenses will end up being affected by the higher cost of oil?

Unfortunately, just about everything that you need to buy in your life is going to soon be a lot more expensive than it is now, because oil is a huge economic driver.

All Oil Byproducts

When people hear that a barrel of oil is up, because America is for some reason importing and buying instead of producing for itself, people think this relates to motor oil and gas. But it goes far beyond that. There are hundreds, if not thousands of byproducts from oil, which include everything from the clothes and shoes you wear to those fancy phones you use. One of the biggest byproducts is propane, which more and more people are using to heat their homes instead of natural gas, now that Biden has shut down most of that production as well.

All of these byproducts end up going up pretty steeply in cost as oil prices rise.

The Entire Market in General

One of the things that really separated the west, and specifically America from the rest of the world was that America had a surplus of automobiles to handle trucking needs. Trucking meant deliveries could get to their destination all over land routes, and this enabled the strongest economy that the world has ever known. The point here is that so much of America's economy is tied up in trucking and deliveries. No matter the mode of transportation that takes meat and produce from farms to processing plants and then to stores, it requires fuel. Even insofar as the Biden team and likeminded people can make the argument that electric is a better way to go, fuel is still needed in so many areas of construction and charging that the American economy would still feel a sting.

Imagine that a farmer has a set price he sells his crop for, while the processing people and the trucking company both have a standard rate. The farmer pays more to fuel his equipment, and the processors and truckers are paying more for their fuel. So, whatever goods and services they're selling on their end, if they do not increase their rates, they're losing money. By the time you're buying at an item at the grocery store, you're likely seeing at least three separate parties that had to handle that item, and thus three separate rate increases. So now you understand why you're paying $3.50 for a dozen eggs that only cost you $0.75 a year ago. The more issue America is having with its energy supply, the higher prices are going to be on so much.

What really hits people the hardest with inflation isn't necessarily that those certain items go up due to fuel issues, but rather that everyone scrambles and panics and raises their rates in concert. So now you're even paying more to wash your car or to take your kids to a movie. Everything moves in concert. Water can be separate droplets, but they still make up a body of water and move at once. That's the American economy.

The entire economy in the macro sense is going to suffer more thanks to high prices of oil. Those in power want Americans to dream of a day when everything's electric and no fuel is needed, but that's like telling a prisoner to just imagine the day they're free. Sure, it keeps your mind off of the reality you're living in, but that is all it does to be perfectly clear.

Prices will continue to rise, and your expenses on just about everything will continue to increase, until which point the American government figures out a way to get more oil for a cheaper price.