President Trump says surging oil prices are a short-term problem and a worthwhile sacrifice as the war in Iran causes supply concerns in energy markets.
West Texas Intermediate crude oil prices spiked to slightly over $100 per barrel on Monday, raising concerns about wider shocks to global economies.
“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,” Mr. Trump said on Truth Social late Sunday, adding in all caps for emphasis: “Only fools would think differently!”
Crude oil prices have not exceeded $100 per barrel since the Russian invasion of Ukraine in 2022.
Prices surged 35% last week because of the toll of the conflict in the Middle East.
The price shock had a ripple effect on Wall Street, where the Dow Jones Industrial Average opened down 400 points Monday, and the other major indexes tumbled more than 1%.
SEE ALSO: Markets rebound after Trump suggests war with Iran is nearing completion
Mr. Trump ordered joint U.S.-Israeli strikes against Iran on Feb. 28, saying Tehran did not agree to American demands during negotiations over the Islamic republic’s nuclear ambitions, missile programs and support for terrorist proxies in the Middle East.
Iran retaliated with strikes on oil-rich Gulf states and clamped down on traffic in the Strait of Hormuz, a vital sea channel for oil tankers.
Senior Iranian clerics selected Mojtaba Khamenei as Iran’s new supreme leader on Monday. He is the son of Ayatollah Ali Khamenei, who was killed in initial U.S.-Israeli strikes, and Mr. Trump had called him an “unacceptable” choice, raising fears the conflict would only deepen.
Qatar’s Energy Minister Saad al-Kaabi told the Financial Times on Friday that oil prices could surge to $150 per barrel if traffic does not flow through the strait.
Soaring energy prices could reverberate across the economy. U.S. stocks plummeted last week due to concerns about oil prices and a protracted war with Iran.
Group of Seven ministers met on Monday to consider ways to alleviate oil-price pressures, including a coordinated release from petroleum reserves.
Mr. Trump has not moved yet to tap the Strategic Petroleum Reserve in the U.S., and some Republicans echoed the president’s belief that price shocks would be temporary.
Congressional Democrats, meanwhile, chastised the administration on Monday for easing sanctions on Russian oil. The move allowed Indian refiners to resume purchases.
“Your recent decision to provide a 30-day waiver is dangerous, self-defeating, and indefensible,” Sen. Ruben Gallego, Arizona Democrat, and Rep. Sam Liccardo, California Democrat, wrote to Treasury Secretary Scott Bessent.
The Democratic lawmakers pointed to reports that Russia is providing Iran with intelligence on U.S. troop locations.
“This waiver constitutes an inexplicable act of material benefit to the enemy,” they wrote.
“There are going to be some temporary effects on our domestic economy, but as soon as this is taken care of, those prices will tumble, and people will recognize that this was a short-term cost to pay for a major long-term gain in terms of peace and security,” House Majority Whip Tom Emmer, Minnesota Republican, told CNBC.
The Trump administration is eyeing steps to jump-start traffic in the strait.
It announced a reinsurance program for ships that are worried about incurring losses in the Middle East. Mr. Trump also said the U.S. Navy might need to escort ships through the strait.
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
Please read our comment policy before commenting.