The recent flare-up of tensions between Iran and Israel may end up causing a larger headache for President Donald Trump’s administration beyond foreign policy concerns, according to one national security expert.
Politico reported Friday that Israel’s attack of Iran on Thursday – followed by Iran’s retaliatory strikes on Israel on Friday – could lead to a spike in global oil prices. And that, in turn, could make prices at the pump go up noticeably higher as Americans fill their tanks this summer. Gasbuddy.com analyst Patrick De Haan projected gas prices to jump by as much as 25 cents per gallon by July.
Bob McNally — who leads the energy and geopolitical analysis firm Rapidan Energy and served on former President George W. Bush’s National Security and National Economic Council – said that depending on how much oil prices increase, it could have implications for the global economy as well.
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“Geopolitical price spikes pose a bigger risk of recession than inflation in my view,” McNally said. “The White House should be worried.”
Israeli Prime Minister Benjamin Netanyahu has suggested that his offensive against Iran is still in the beginning phase, and that there could be more attacks on the regional superpower in the coming weeks. If Israel expands its assault to include Iranian oil fields or export infrastructure, the impact on oil prices could be even more severe, according to market analyst Andy Lipow of Lipow Oil Associates. He warned that the price for a barrel of oil could go as high as $100 (current prices are roughly $74 as of Friday).
“Iran knows full well that President Trump is focused on lower energy prices,” Lipow told Politico. “Actions by Iran that impact Middle Eastern oil supplies raising gasoline and diesel prices for Americans are politically damaging to the president.”
Should gas prices jump as a result of the ongoing tension in the Middle East, Trump has few options outside of the influence of the presidential bully pulpit. Politico reported he may tap into the U.S. strategic oil reserve — as former President Joe Biden did – though the reserve is down by roughly a third of where it was prior to Biden’s action.
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Click here to read Politico’s full article.
