Of course, the lower US dollar means cheaper oil in Europe, Asia, and all countries with appreciating currencies. Oil prices hit records in the US in 2004 and 2005, but not in Europe, which partly explains why economic growth there has not been affected. When Americans paid US$120 per barrel, Europeans paid only about 76 euros per barrel.
Several factors have prevented high oil prices from affecting the demand for petroleum products in the US in recent years, such as increased government spending, low interest rates, tax breaks, and an increase in real incomes.
To be sure, the weaker US dollar has forced some American families to spend their vacations in the US instead of Europe.
But since many Americans use gas-guzzling SUVs for their vacations, demand for gasoline has remained high.
Unless and until US consumption patterns change or a rebounding US dollar increases oil production, Americans will bear the brunt of single-currency oil pricing.
A.F. Alhajji is an energy economist and a professor at Ohio Northern University.
Copyright: Project Syndicate