The US president has attempted to quell fears that the military conflict he launched would exacerbate the global energy crisis
The surge in oil prices will not stop the US from waging its war on Iran, President Donald Trump has said, after Brent shot past $100 per barrel on Sunday, marking the biggest daily gain since the start of the Covid-19 pandemic in 2020.
In response to the US and Israeli airstrikes, Iran has closed the Strait of Hormuz and struck tankers attempting to cross the waterway, which serves as a route for about one-fifth of the world’s oil supply. Iraq, the United Arab Emirates, and Kuwait, all major oil producers, have cut output after running out of storage space.
In a Truth Social post on Sunday, Trump downplayed the effects of his war on global trade.
"Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY!" Trump wrote.
During his reelection campaign, Trump promised voters cheaper gas and no costly wars. However, according to data from the American Automobile Association (AAA), the national average price of regular gasoline has risen by roughly 15% over the past week to about $3.45 per gallon, with some areas reporting increases of nearly 30%.
US Treasury Secretary Scott Bessent said on Friday that Washington was exploring additional measures to lower oil prices, while Energy Secretary Chris Wright pledged to bring gasoline back below $3 per gallon “before too long.”
Last week, the Treasury formally allowed India to temporarily buy oil from Russia, with Bessent saying that the US could potentially “unsanction” more of Russia’s energy exports.
JPMorgan chief economist Bruce Kasman told Reuters that the “near-term scenario” could see crude prices spike toward $120 per barrel before settling “at an elevated $80 bbl through mid-year” if the conflict persists. Russian presidential investment envoy Kirill Dmitriev said on Monday that oil prices could exceed $200 a barrel in the event of a “prolonged conflict.”
