Trump Warns Oil Producers on Prices Following Iran Attack
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President Donald Trump demanded that energy producers push down crude prices following U.S. military strikes on Iran, amid fears that an escalating Middle East conflict and supply disruptions could extend the recent surge on oil markets.
“EVERYONE, KEEP OIL PRICES DOWN. I’M WATCHING! YOU’RE PLAYING RIGHT INTO THE HANDS OF THE ENEMY. DON’T DO IT!” Trump posted June 23 on social media.
In a subsequent post, Trump urged the Energy Department to “DRILL, BABY, DRILL!!! And I mean NOW!!!”
Energy Secretary Chris Wright responded in a post on X that “we’re on it.”
— Rapid Response 47 (@RapidResponse47)
Iran has warned that Trump’s decision to join Israel’s military offensive with attacks on its three main nuclear sites would trigger retaliation. Tehran could close the Strait of Hormuz, a waterway at the mouth of the Persian Gulf that carries about a quarter of the world’s seaborne oil trade.
Although concern has focused on that chokepoint, any possible retaliation could affect other infrastructure key to the region’s oil processing and shipment.
Roughly 70% to 75% of the crude, condensate and refined products that come out of the Gulf flow through some nine facilities, which could be bottlenecks, said Colby Connelly, a senior fellow at the Middle East Institute.
Higher prices for oil — as well as the gasoline and jet fuel made from it — would squeeze U.S. consumers whose bank accounts have been stretched in recent years by inflation, a development that could inflict political pain on Trump and Republicans.
If the strait is shut to shipping, crude could soar past $130 per barrel, according to a Bloomberg Economics estimate. White House Press Secretary Karoline Leavitt said earlier June 23 that the U.S. is “actively and closely monitoring this situation in the Strait of Hormuz and the Iranian regime would be foolish to make that decision.”
We’re on it!
Thanks to President Trump’s leadership, America’s energy security is stronger than ever before 🇺🇸 — Secretary Chris Wright (@SecretaryWright)
Global oil benchmarks are roughly 10% higher than they were immediately before Israel attacked Iran earlier this month. But June 23 saw markets erase initial gains, as fears began to fade of an immediate disruption of supplies. Brent crude initially surged to $81.40 a barrel, but later dropped below $77.
Trump’s directive for more U.S. drilling cannot, on its own, spur more oil and gas development.
U.S. oil executives have shown little appetite in recent years to dramatically boost output, with the price of West Texas Intermediate at times falling below the cost of production at some sites.
Oil companies generally are plotting investment decisions in the U.S. based on long-term price forecasts — not the temporary spike spurred by the attacks on Iran and the fear of supply disruption in the Mideast.
Well before the American attack, Trump administration officials discussed the potential for oil supply disruptions that could drive up prices for crude, as well as options for countering any surge, according to people familiar with the matter.
The current climb reflects “the market pricing in the potential for disruption” and not a reaction to any actual loss in supply, Connelly said. Even so, “there are impacts that are beginning to be felt elsewhere in the world, and the macroeconomic outlook will feel that the longer this goes on, even if there is no actual loss of supply.”
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Trump’s post suggests the emerging oil-price impacts — which could ripple across the economy — are weighing on him. For weeks before the conflict, Trump had praised the fall in oil prices, even to the chagrin of the executives who helped bankroll his 2024 presidential campaign.
Yet Trump has limited options to help contain the price impacts at home.
While he could tap the U.S. emergency oil stockpile, that reserve has been depleted to about 400 million barrels of crude, about half its capacity.
Analysts warn even a strategic release of emergency crude would do little to offset the loss of potentially millions of barrels of crude daily through the Strait of Hormuz, should Iran retaliate by seeding its narrow shipping lanes with naval mines to disrupt traffic.
