Prolonged Middle East fight threatens Trump’s lower gas prices

President Trump has bragged about reducing the cost of a gallon of gas, but the war that the U.S. is waging in Iran is about to cause gasoline prices to rise.  

U.S. consumers are largely insulated from shortages and major price jumps caused by the now-raging war in the Middle East that has interrupted its oil and gas production.  

But analysts warn that Mr. Trump will see his vaunted reductions in gasoline prices evaporate if the fighting drags on for weeks or months.

Oil prices jumped Monday following the U.S.-Israeli attack on Iran that began on Saturday and Iran’s retaliatory strikes on Saudi Arabia and other oil-producing nations in the Middle East. 

U.S. crude oil closed up $4.21 at $71.23 a barrel, marking the highest single-day increase since 2022. Brent crude, the global benchmark for international oil, was up $4.87 at $77.74 per barrel. 

Within a few days, the spike in oil is likely to be reflected at American gas pumps. 

It’s a slight increase for now, but one that could go much higher, oil market analysts said, if the war drags on beyond a week and threatens to impose long-term disruptions to oil processing and shipping in the Middle East. Some analysts say oil could jump to $90 or $100 a barrel. 

“We could see a pretty significant uptick in crude prices well above what we’ve had today,” David Blackmon, an energy public policy analyst based in Mansfield, Texas, told The Washington Times. 

A sharp increase in gas prices would extinguish one of Mr. Trump’s most significant economic achievements of his second term and one he bragged about just a week ago in his State of the Union address. 

Higher gas prices will reverberate through the economy and could drive higher interest rates and inflation, which are two key voter issues in this midterm election year that Mr. Trump has struggled to improve. 

The national average fuel price listed by AAA on Monday was just under $3.00 a gallon, down from $3.61 during President Joseph R. Biden’s final year in office and a big decline from prices as high as $6 per gallon seen at some pumps during the Biden administration. 

Mr. Trump boasted that some parts of the U.S. are selling gasoline under $2 a gallon. 

“When I visited the great state of Iowa just a few weeks ago, I even saw $1.85 a gallon for gasoline,” Mr. Trump proudly told Congress last week. 

But Mr. Trump acknowledged Monday the fighting in the Middle East could continue for a month or more.  

“We’re already substantially ahead of our time projections, but whatever the time is, it’s ok. Whatever it takes. We projected 4 to 5 weeks, but we have capability to go far longer than that. We’ll do it.” the president said at a White House Medal of Honor event. 

The stock market held relatively steady on Monday, erasing most of its earlier losses by the close. The Dow Jones dropped about 73 points, or 0.1%.

The uptick in oil prices on Monday was triggered in part by the drastic drop in cargo traffic in the Strait of Hormuz, a critical choke point for the world’s oil supply. Traffic through the channel came to a near standstill on March 1 following Iranian drone and missile strikes on at least five commercial shipping vessels. 

Analysts say if the fighting in the Middle East lasts longer than 25 days and continues to interrupt traffic through the Strait of Hormuz, oil-exporting countries in the Middle East, including Saudi Arabia, will have to shut down production because their national storage tanks will be full. 

“At that point, then we could have a real structural supply problem on the global market,” Mr. Blackmon said.

The U.S. produces much of its own oil domestically or imports it from Canada, so shortages at U.S. gas pumps due to Middle East turbulence aren’t much of a threat, analysts said. 

But America won’t be insulated from higher prices for long. 

“Local or regional gasoline prices in the U.S. are influenced by crude prices, because crude oil prices are influenced by global events,” Matt Smith, analyst at the data and analytics firm Kpler, told The Times. “So these global events are going to affect the price at our local gas stations.”

Oil shortages won’t be a significant problem for the U.S., thanks to its supply from Canada.

“We’ll feel the price impact, we won’t feel the supply loss,” Mr. Smith said.