{"id":293830,"date":"2026-02-20T18:13:12","date_gmt":"2026-02-20T18:13:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/293830\/"},"modified":"2026-02-20T18:13:12","modified_gmt":"2026-02-20T18:13:12","slug":"a-us-attack-on-iran-could-send-oil-prices-surging-at-precarious-time-for-trump","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/293830\/","title":{"rendered":"A US attack on Iran could send oil prices surging at precarious time for Trump"},"content":{"rendered":"

\n President Donald Trump is weighing whether the United States should attack Iran, a country that controls both the third-largest proven oil reserves on Earth<\/a> and one of the world\u2019s most important oil shipping lanes. The consequences for oil prices and Americans\u2019 wallets could be swift and severe.\n <\/p>\n

\n The United States has been building up its military presence in the Middle East in recent weeks, and Trump has suggested a US-led strike could be imminent. That\u2019s sent oil prices up sharply.\n <\/p>\n

\n \u201cWe may have to take it a step further, or we may not,\u201d Trump said Thursday about Iran. \u201cMaybe we\u2019re going to make a deal. You\u2019re going to be finding out over the next probably 10 days.\u201d\n <\/p>\n

\n Brent crude, the global benchmark, has surged 7% since Tuesday and topped $70 a barrel<\/a> Wednesday for the first time since July \u2013 shortly after the last time the United States attacked Iran<\/a>. US crude has gained $10 over the past month.\n <\/p>\n

\n But America\u2019s escalating conflict with Iran threatens to send oil prices significantly higher, potentially reversing the yearlong slide in gas prices that Trump has boasted about for months. Cheaper fill-up costs helped offset some of the sting of high prices from a combination of Biden-era inflation, Trump\u2019s tariffs and a stubbornly stuck housing market.\n <\/p>\n

\n Affordability concerns have made Trump and Republicans politically vulnerable ahead of this year\u2019s midterms. The last thing they need is an all-out oil price shock.\n <\/p>\n

\n The good news: that remains unlikely. But it\u2019s not out of the question.\n <\/p>\n

\n If the US attacks, Iran could hit back with missiles or other similar weapons, as it did against a US military base and Israel last summer. That could disrupt the oil-rich region, but the effects on oil would almost certainly be temporary.\n <\/p>\n

\n But Iran also holds an X-factor: control of the northern side of the Strait of Hormuz<\/a>.\n <\/p>\n

\n The narrow waterway, just 21 miles wide, serves as a pinch point for 20 million barrels of crude every day, about one-fifth of global production.\n <\/p>\n

\n The strait is the only way to ship crude from oil-rich Persian Gulf countries to the rest of the world. Oil\u2019s bullish run in recent days is largely a reaction to worries Iran will restrict that supply.\n <\/p>\n

\n Iran partially closed the strait earlier this week<\/a> for military drills. That\u2019s what sent Brent prices about $5 a barrel higher.\n <\/p>\n

\n \u201cA prolonged disruption in the Strait of Hormuz would send oil above $100,\u201d said Rob Thummel, a senior portfolio manager at Tortoise Capital.\n <\/p>\n

\n But the odds of that happening are low for a few reasons.\n <\/p>\n

\n First, Iran would have to be able to control the strait after a strike. The US already has a robust and growing military presence in the region, and it\u2019s not clear Iran would have the wherewithal to support an oil blockade while under attack.\n <\/p>\n

\n Second, the Iranian government would be depriving itself of a key source of revenue. Iran has a surprisingly diversified economy for a sanctioned nation \u2013 oil makes up only about 10% to 15% of the country\u2019s overall gross domestic product. But Iran\u2019s government relies heavily on the oil industry for its finances, bringing in half of its revenue from crude exports.\n <\/p>\n

\n Third, the region has recovered from attacks quickly in the past \u2013 including the attack on Iran last year. When drones attacked Saudi Aramco facilities in Abqaiq<\/a>, Saudi Arabia, in 2019, taking out 5% of the country\u2019s oil production, prices spiked but surprisingly returned to normal within a matter of weeks. The United States attributed that attack to Iran<\/a>.\n <\/p>\n

\n Even if a blockade in the Strait remains unlikely, disruption caused by a US attack could nevertheless send oil prices even higher, above their the recent gains \u2013 perhaps by another $10 a barrel, Tuttle said.\n <\/p>\n

\n Iran produces about 3.2 million barrels of oil per day on average, according to OPEC<\/a>, accounting for roughly 4% of global crude production. That makes Iran the world\u2019s sixth-largest oil producer \u2013 an impressive feat, considering Iran faces worldwide sanctions that have severely limited its potential customers. To skirt sanctions, Iran operates a shadow fleet of vessels to export oil at a steep discount.\n <\/p>\n

\n Oil at $80 a barrel could send gas prices, on average, back above $3 a gallon.\n <\/p>\n

\n A month ago, US gas prices fell to about $2.80 a gallon on average, according to AAA. Now they\u2019re sitting at $2.92 a gallon.\n <\/p>\n

\n \u201cIt\u2019s been really nice to have low gasoline prices, but it\u2019s creeping up on us, and high prices could be here sooner than you know \u2013 right before the midterms,\u201d Tuttle said. \u201cWhere affordability is a big issue, if gasoline prices come into the mix, the goal will have to be to keep oil prices lower to keep gasoline prices lower.\u201d\n <\/p>\n

\n Trump has long touted \u2013 and exaggerated \u2013 the effects of lower gas prices. A year ago, gas prices were 21 cents a gallon more expensive. That roughly adds up to between $100 to $200 in annual savings per driver in 2025, depending on drivers\u2019 locations and habits, according to the US Energy Administration<\/a> and the Department of Transportation.<\/a>\n <\/p>\n

\n But those savings pale in comparison to the average of $1,000 in additional tax burdens paid by each US household as a result of Trump\u2019s tariffs, according to the Tax Foundation<\/a>.\n <\/p>\n

\n Americans\u2019 opinions of the US economy remain near all-time lows. Higher gas prices aren\u2019t going to make Americans any happier about that.\n <\/p>\n","protected":false},"excerpt":{"rendered":"President Donald Trump is weighing whether the United States should attack Iran, a country that controls both the…\n","protected":false},"author":2,"featured_media":293831,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":{"0":"post-293830","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-new-zealand","11":"tag-newzealand","12":"tag-nz"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/293830","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=293830"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/293830\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/293831"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=293830"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=293830"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=293830"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}