Investing.com -- The global economy is far less vulnerable to an oil price shock today than it was during the crises of the 1970s, according to a note from UBS economist Arend Kapteyn on Wednesday.

In a comparison of oil intensity across decades, Kapteyn told investors that the share of oil spending in GDP has “more than halved” since 1974 despite higher prices.

Kapteyn noted that the head of the International Energy Agency recently said more oil has been lost in the current Middle East conflict than in both 1970s oil shocks combined.

But UBS argued that assessing the economic impact is not straightforward, largely because “oil intensity has fallen sharply over time.”

For the United States, Kapteyn compared consumption and spending levels in 1974 and 2024.

In 1974, the U.S. consumed 803 million tonnes of oil, amounting to “roughly 4.8% of GDP.” By contrast, in 2024, consumption is “barely higher,” at about 813 million tonnes, but GDP has grown nearly twentyfold.

At today’s average oil price of $81 per barrel, the economist wrote that spending amounts to “roughly 1.7% of GDP.”

Even if oil reaches $100 per barrel, Kaplan wrote that spending would rise to “around 2% of US GDP - still well below the 1974 level.”

Europe shows a similar trend. UBS estimated the EU’s oil spending has fallen from “about 3.7% of GDP in 1974 to roughly 1.8% in 2024,” helped by slower GDP growth but “larger gains in energy efficiency.”

Kapteyn said the data underscores how the “oil intensity of the global economy has declined significantly,” reducing the macroeconomic strain from today’s shocks.