TJ Walker explains how Iran conflict drove U.S. gas prices to $3.58 a gallon and diesel to $4.83, with Brent crude near $120. The Strait of Hormuz carries 20% of global oil, making supply disruptions politically dangerous. Fuel prices are visible daily reminders that swing elections, regardless of claims about U.S. energy independence.
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Gas prices jump as war hits oil markets. Americans are already feeling the economic effects of the Iran conflict at the gas pump. Gasoline prices have risen for 7— or excuse me, 11 straight days, reaching a national average of $3.58 per gallon, roughly 20% higher since the strikes on Iran began. Diesel prices have climbed even faster, rising to 28% to nearly $4.83 per gallon. Oil markets have been volatile as traders focus on the Strait of Hormuz, the narrow waterway that carries about one-fifth of the world's oil supply. At one point, the week's global benchmark, Brent crude, surged close to $120 a barrel before falling back near $90. History shows fuel costs quickly become political flashpoints in the United States, shaping elections and presidential approval ratings when sudden spikes hit American drivers. Okay, so look, I'm not aware of any president who actually literally rolled back prices to where they were 4 years before they took office. That's essentially the, the promise that President Trump said he was gonna get prices back to before Biden was in office. Well, that clearly didn't happen, but in fairness to Trump, cuz I'm here as a sane, sensible centrist, nobody does that. It's really impossible to do unless you are in a severe depression and nobody wants that. But it's far different to actually take a policy, see prices skyrocket for something like the gas pump, which people see every day, or certainly once a week. They're looking at the price, they're seeing it go up. It hits them in the way that just inflation on an insurance price that they may pay once a year doesn't hit them in the face. Weekly. To have that happen and people make a direct connection, okay, this is happening because we bombed Iran. People are making that connection. If they're not yet, they will be. It's hard to imagine where the president and his party don't really take a strong political hit at the polls for this. Certainly if America is still at war, whether officially or unofficially, as we are now in Iran, and gas prices are 20, 25, 30, 35, maybe 100% higher than they were last month, it's, it's really hard to imagine the incumbent party, the Republican Party, not losing not just 20, 30, maybe 40, 50 seats in the US Congress. This is the sort of thing that could foment a wave election. So let's look at this a little more deeply. Many people in the Trump administration allegedly believe that somehow we were immune to this. Oh, America is no longer dependent on outsiders for oil. We are a net exporter of energy, unlike in the '70s or the '60s or even the '80s. That's true. It is true. But if you think that's gonna keep the price of oil down, you simply don't understand capitalism. You don't understand commodities. You don't understand world markets. If 20% of the oil in the market is suddenly gone, there's a worldwide price for oil and it's all going to go up. If you think American producers of oil are gonna say, hey, I know I could sell my oil to Europe for $4 a gallon, but you in America would prefer having it for $3. Okay, you're an American, I'm an American, I'll sell it to you for $3. That's not how it works. That's not how big oil companies work. Frankly, it's not how natural gas companies work. They are going to try to get a market price and it's simply supply and demand. Now, as of the beginning of the recording of this show, there have been a number of countries that are releasing their own reserve supply so that there's not this immediate shortage and spike up of prices. That'll last a little while, but that only lasts for so long. And frankly, that's not the intended purpose. Of using your reserve energy supplies. It's supposed to be for when there is no energy, not just to not make a politician look bad because the price of gas went up. But that appears to be what happened. Again, here, here are the facts. US gas average price as of Wednesday, $3.58 per gallon, gone up 11 days in a row. The Brent crude is currently priced at $91 per barrel, and it had shot all the way up to $120 a barrel on Monday. So there's a lot of kind of wild activity in stock markets these days because of what's going on with energy prices. So let's look at some historical background. 1973, the oil embargo triggered a US recession and energy crisis politics. I will remember that. I remember the long gas lines in the year after and the year after. Gas shortages weakened Richard Nixon's political environment. The oil shock hurt Jimmy Carter and helped Jimmy— or excuse me, Ronald Reagan win in 1980. Everyone thinks of Jimmy Carter as this horrible failed presidency and the economy was so bad. He actually had a lot more economic growth in his term than most presidents. It just the last year and a half was bad. If he had reversed the order and been like Reagan in his first term, he probably would have won reelection very easily. The 1990 Gulf War oil spike briefly shook markets and voters. 2008 gas prices were around $4. It shaped a lot of economic anxiety, certainly didn't help the party in power that year, which was the Republican Party. And energy costs became a big issue in the 2008 election. So politicians can gaslight, and Donald Trump is pretty good at it, but it's very hard to gaslight the American people on the price of gas because they're staring at it every day. And a politician can say, who are you going to believe, me or your lying eyes? Maybe if their eyes only see it once, they can get away with that. But if their lying eyes are telling them every single day gas prices are up, pretty soon they're going to believe their own eyes.
