‘We don’t need the Hormuz Strait’: Donald Trump says, as fuel prices raise in the U.S.
President Donald Trump, who claims he’s been negotiating with Iran, now claims that the Strait of Hormuz is “not important” to the United States. But as the war wages on, fuel prices continue to climb and hurt consumers throughout the US.
When asked by a reporter how close Trump is getting to forming a coalition with allies to protect US tankers and warships, he said that there’s already one in place. He continued, “But they should have been up here a long time ago.” He’s referred to other allies who had cold feet in joining the war.
“And you know, they’re affected. The amazing thing is, we don’t need the Hormuz Strait. We don’t need it—we don’t need it at all,” Trump claimed. “We have twice the amount of oil as Saudi Arabia or Russia, and soon, it will be three times the amount,” he added, promoting that the United States should keep drilling for oil domestically. More specifically, in his words, “Drill, baby, drill.”
Creating a war at the expense of allies
But if Trump is aware that allies are dependent on oil in the Middle East, then why attack Iran? Moreover, why drag allies into a war created by the United States on a whim?
Several Asian allies are already feeling the burn of the war. Japan, a country reliant on oil shipments from the Middle East, is starting to use 30 days’ worth of its oil reserves. Southeast Asia has also been heavily hit by the crisis. The Philippines has declared a state of national emergency because of the country’s dwindling fuel supply, while Sri Lanka is imposing weekly rations on fuel for consumers.
Needless to say, in this regard, the Trump administration has failed its international allies.
But even domestically in the United States, gas has surged upwards of four dollars a gallon. The administration argument is that it’s just a temporary fluctuation, but can drilling for more oil be the solution?
Oil prices are rising
If the United States can locally drill for oil, how fast can domestic producers expand their operations?
Top-producing oil and gas companies are reportedly reluctant to expand their business operations because setting up new wells may be unprofitable. According to Politico, one executive said that it takes “several months” to set up a new oil rig. But because of the Trump administration’s mixed messaging about when the war will end, the executive felt disincentivized to expand.
Although there is an increased domestic demand for oil, there’s no telling when prices will stabilize. Trump can claim that the United States has no use for the Strait of Hormuz, but the war has clearly caused a disruption in the energy market.
Chevron CEO Mike Wirth spoke at CERAWeek in Houston on Monday about the oil markets amidst the war. He said, “They’re uncertain, they’re unpredictable, they’re volatile.”
He also said, “There are very real, physical manifestations of the closure of the Strait of Hormuz that are working their way around the world and through the system that I don’t think are fully priced into the futures curves on oil.” Essentially, the fuel prices currently seen by consumers have not yet peaked. It’s highly likely for prices to continue increasing. This is because the full impact of the war has not yet been factored in.
Nevertheless, Wirth remains confident in the United States’ capacity to sustain itself because of its abundance in oil and gas. There’s no clear end in sight, so it wouldn’t hurt to expand energy-related endeavors in the United States. With Trump now considering sending soldiers to several locations in Iran, it’s possible for the conflict to drag out longer.
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