The Trump administration is evaluating the possibilities repercussions on the economy of a potential increase in prices of the oil up to $200 per barrel as a result of the war in Iran, so as to be prepared for all eventualities, including a prolonged conflict. Some sources report this Bloomberg specifying also that in times of crisis it is normal to make assessments of growth prospects, without this necessarily representing a forecast.
Even before the war began, the Secretary of the Treasury Scott Bessent had expressed concern that the conflict would increase oil prices e damaged economic growth, sources said. Senior Treasury officials had been communicating their concerns about fluctuations in oil and gasoline prices to the White House for several weeks.
The White House's optimistic narrative and people's rush to gas stations
In the United States the mood is that of “the emperor's new clothes”. The White House spokesperson Kush Desai has defined such “fake” version, stating: “While the administration is constantly evaluating various price scenarios and economic impacts, officials are not considering the possibility of oil reaching $200 a barrel, and Secretary Bessent has not expressed 'concern' about short-term disruptions resulting from Operation Epic Fury.” Bessent, he said, has repeatedly “expressed his and the administration's continued confidence in the long-term trajectory of the U.S. economy and global energy markets.” On March 12, Secretary of Energy Chris Wright had warned that a surge to $200 a barrel was “unlikely.”
Meanwhile, oil prices have skyrocketed since the United States and Israel attacked Iran on February 28, with the West Texas Intermediate up about 30% to $93 a barrel. The Brent has increased by about 40% in the same period, with a price today above $105.
This also resulted in a increase in the price at the pump even for Americans: the national average price of petrol has increased by more than 30% in recent weeks, settling around $4 a gallon, cancelling out the declines recorded in the last year, which Trump had touted it as a major economic success. Americans are already looking for ways to offset rising gas prices. At a Costco Wholesale Corp. gas station near San Antonio, wait times for fuel have reached 30 minutes, and lines stretch around the block. Elsewhere, drivers are constantly updating apps like GasBuddy and scrambling to find cheaper fuel and discounts. Others say they've cut back on groceries, takeout, and travel.
The impact on international markets if oil went to $200
An oil price at dollars 200 would represent a huge shock to the world economyIn real terms, net of inflation, the price reached tlevel up only once in the last half century: in 2008, just before the global financial crisis.
But the damage would also be there at lower levels. Bloomberg predicts that already an oil price of dollars 170 to the barrel for a few months It would push up inflation in the United States and Europe, slowing economic growth. Trump He said he was not concerned about rising energy costs, even suggesting that they were beneficial to the United States, and predicted that oil prices would fall dramatically once the war was over.
But the near-total blockade of shipping through the Strait of Hormuz, which normally carries up to a fifth of global oil and gas exports, has already hit economies around the world. Last week, the president of the European Central Bank, Christine Lagard, stressed that the hostilities had fueled inflationary risks. central banks Frankfurt, London and Japan are preparing to raise rates of interest starting next month.
The prospects for the US monetary policy are becoming increasingly uncertain, as the Federal Reserve carefully monitors the impact of rising oil prices on inflation. Last week, the Fed Chairman, Jerome Powell He said it was too early to assess the effects of a surge in oil prices on the U.S. economy.
Some countries are starting to take emergency measures
Some countries in the world are already taking drastic decisions to try to deal with the situation: although oil prices above $100 a barrel will cause problems for all countries in the world, some are more exposed and less able to cope with rising prices.
In South Korea, President Lee Jae Myung called on the public to conserve electricity and established an emergency task force to prepare for adverse scenarios. Japan Japan is reviewing its petroleum supply chain and has begun releasing oil from its national strategic reserves to offset supply disruptions resulting from the conflict with Iran. Prime Minister Sanae Takaichi said earlier this week that Tokyo would release about 80 million barrels of stored oil to local refiners.
in Philippines, President Ferdinand Marcos Jr. announced this week the national state of energy emergency for one year in response to the conflict in the Middle East and what he called a “imminent danger” for the country's energy supply and "a threat for the country's energy security." A specially created committee will ensure the orderly movement, procurement, distribution, and availability of fuel, food, medicines, agricultural products, and other essential goods.
Energy market regulators have announced the suspension of the wholesale spot electricity market across all three of the country's grids.
