Trump Turned To Big Oil When Iran Turned Off the Tap
When Washington can’t fix a geopolitical crisis, it asks Big Oil to paper over it. With midterm elections looming, Energy Secretary Wright and Interior Secretary Burgum called top oil executives, urging them to pump more. Even so, gas prices have already surged from $2.98 to over $4 per gallon, and increasing production won’t solve that.
- Iran’s chokehold on the Strait of Hormuz disrupted a waterway carrying about a fifth of global crude — sending Brent prices from ~$70 to over $110 per barrel.
- Senior oil executives shot back, saying the only real option is reopening the strait — since markets expect oil prices to fall by the time new rigs are deployed, per futures prices.
About that deal: Reopening the Strait is easier said than done. Trump briefly floated joining Iran in tolling ships before reversing, sending exactly the kind of mixed signal that has the oil industry scrambling. With more ceasefire negotiations ahead, Big Oil is lobbying hard for the White House to hold firm, and the stakes go well beyond higher gas prices. If Iran gets to control the Strait, Gulf state leaders warn it could embolden China and others to do the same. One chokepoint, unlimited precedent.