President Trump on Thursday said the U.S. could profit from high oil prices but that stopping the “evil” Iranian regime from obtaining a nuclear weapon was far more important to him.
By linking high prices to profits, Mr. Trump sought a silver lining to the Middle East energy crisis unfolding alongside his war against Tehran, as the benchmark Brent crude-oil price topped $100 per barrel.
“The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,” Mr. Trump wrote on social media.
Others were not so optimistic. U.S. stocks plummeted again as investors digested the oil situation and rhetoric from Iran’s new supreme leader, Mojtaba Khameini, who said he planned to clamp down on the Strait of Hormuz, a major oil artery, to dial up the pain on the U.S. and its allies.
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The International Energy Agency on Thursday said the war in the Middle East is “creating the largest supply disruption in the history of oil markets” as crude prices spiked again and tankers came under fire in the Gulf region.
The 32-member agency said oil shipping through the Strait of Hormuz has slowed from 20 million barrels a day to a “trickle.” Its monthly report, published Thursday, projected the global oil supply would plunge by 8 million barrels per day in March.
SEE ALSO: Middle East conflict is the largest oil disruption ever, IEA says
Senate Minority Leader Charles E. Schumer, New York Democrat, said Mr. Trump severely blundered and that freeing up the oil passage could “potentially require American boots on the ground.”
“How did Donald Trump not see this coming? How did his planners not see this coming?” Mr. Schumer said. “This is the one bit of leverage Iran has.”
The national average price for a gallon of gas reached $3.60 on Thursday, an increase of 22% from a month ago, according to the AAA motor club.
The club said average prices were highest out West, topping $5 a gallon in California and more than $4 in Hawaii, Washington state, Nevada, Oregon and Arizona. States with the cheapest gas were in the heartland, with Kansas, Oklahoma and North Dakota seeing average prices just over $3 per gallon.
Mr. Trump is balancing his war aims in the Middle East with concerns about affordability back home.
In his social media post on oil prices, he said that “of greater interest and importance to me, as President, is stopping an evil Empire, Iran, from having Nuclear Weapons, and destroying the Middle East and, indeed, the World.”
“I won’t ever let that happen!” he wrote.
But the economy remains a top concern. Writing on Truth Social, Mr. Trump urged Federal Reserve Chair Jerome Powell to cut interest rates.
“Where is the Federal Reserve Chairman, Jerome ‘Too Late’ Powell, today?” Mr. Trump wrote. “He should be dropping Interest Rates, IMMEDIATELY, not waiting for the next meeting!”
The Fed is expected to keep interest rates steady after it meets on Tuesday and Wednesday.
Stocks were down sharply on Thursday, with the Dow Jones Industrial Average falling more than 700 points, or 1.5%.
Experts said higher oil prices are a mixed bag for Americans. High global prices affect gas prices, though elevated prices can benefit domestic producers and associated industries, said Kenny Stein, vice president of policy at the Institute of Energy Research.
“For the U.S., as a practical matter, we can sustain the disruption indefinitely — as long as the Trump administration is prepared to endure the political hit of higher gas prices – because we are not dependent on Persian Gulf supplies,” Mr. Stein said. “Our friends and allies, on the other hand, will be hurting. Iran’s hope is to make things difficult for our friends in the hope that they will lean on us to call off the attack.”
Oil prices are rising even though the IEA agreed Wednesday to release 400 million barrels of oil from national stockpiles.
Three more ships were hit by projectiles — one near the United Arab Emirates and two in Iraqi waters — overnight Wednesday into Thursday after reports of three previous vessels being struck Wednesday, according to the U.K. Maritime Traffic Operations Centre.
The president has said the U.S. Navy might escort oil tankers through the strait, although Energy Secretary Chris Wright said that is not possible right now.
“It’ll happen relatively soon, but it can’t happen now,” Mr. Wright told CNBC on Thursday. “We’re simply not ready. All of our military assets right now are focused on destroying Iran’s offensive capabilities and the manufacturing industry that supplies their offensive capabilities.”
He said the Navy should be able to escort tankers later this month.
“I’ll be over at the Pentagon later today,” Mr. Wright said. “That is what the military is working on.”
