White House officials are bracing for oil prices to surge past the $150-a-barrel mark as the Iran war stretches into its second month and the Strait of Hormuz remains largely closed, according to a new report.
In recent weeks, the average cost of a barrel of crude has hovered around $100, a figure that the Trump administration now sees as the new “baseline,” though a potential spike to $200 hasn’t been ruled out, a source familiar with the matter told Politico.
As a result, officials have entered “all hands on deck” mode, urgently evaluating options to tame soaring oil prices — which pushed gas above $4 a gallon this week and risks inflating costs across the broader economy.
The best part is that even if everything in the Strait were to return to normal tomorrow, the oil price shock is just barely beginning to filter through the system, so there’s absolutely nothing Trump can do to stop what he caused.
“there’s absolutely nothing Trump can do to stop what he caused.”
Assuming he won’t just abandon it and make it someone else’s problem, like he does with literally everything else he touches.
Oh yeah. Global logistics with slow-boat tankers are scheduled multiple months in advance to keep the machine flowing. With every single route now completely thrown awry, there’s no going back for at least a year.
And then there is the whole inflation feeding through into Fertilizers (mainly from Natural Gas prices rather than Oil prices), in turn feeding through into Food prices, all of which carries even long delays to fully emerge in consumer prices because of the time food takes to grow (more so if you think cattle since fertilizer prices only indirectly push costs up through the increase in feed prices).
Just the first month of war has baked in many months of rising Inflation.