Trump's Iran War Oil Shield Cracks Under Pressure
US President Donald Trump's gamble that America's vast oil wealth would insulate it from global energy shocks has been proven wrong. The Iran war, which began four weeks ago, was meant to be a limited conflict with minimal domestic consequences, but the reality is unfolding differently.
The Strait of Hormuz, a critical waterway for international oil trade, remains closed, and Brent crude prices have surged by 55% since late February to around $110 per barrel. Meanwhile, US West Texas Intermediate has climbed 50% to about $99 per barrel.
Although the US is now the world's largest producer of oil and gas, thanks to the shale boom, its direct exposure to the Gulf region is smaller than that of Asia or Europe. However, with Middle Eastern supplies constrained, buyers are turning to alternative sources, including the US, which is tightening domestic supplies.
US crude exports are on track to hit a record 4.6 million barrels per day in March, and refined product exports are expected to reach an all-time high of about 3.2 million bpd. As a result, US gasoline pump prices have jumped over 30% this month and are likely to breach $4 per gallon within days.