Donald Trump’s decision to authorize the killing of an Iranian general and reignite Middle East tensions briefly roiled energy markets and underscored a U.S. political reality: Higher gasoline prices can tip elections. The president, who is counting on a robust economy to win re-election in November and maintain Republican control of the Senate, is banking on record-shattering surges in domestic oil production to absorb any shocks unleashed by his moves on Iran. “We do not need Middle East oil,” he said Wednesday.
But Trump’s confidence belies U.S. refineries’ continued reliance on heavy grades of crude from the Middle East as well as warnings from oil analysts that renewed tensions — or a strike on energy infrastructure — could still pinch American consumers at the pump. “Americans don’t pay close attention to foreign policy,” but “they do care about gasoline prices,” said Dan Eberhart, a Republican financier and chief executive of drilling services company Canary LLC. “The fear of gasoline prices spiking will make President Trump want to have a more muted military response to this Iranian situation.”
Middle East oil facilities and shipping routes remain a prime target if Iran seeks further retaliation for Qassem Soleimani’s death in a U.S. drone strike. ClearView Energy Partners told clients that Trump’s conciliatory comments Wednesday don’t erase “continuing risk for regional crude oil production and transportation ranging anywhere from hundreds of thousands to millions of barrels per day.” Any attacks designed to disrupt the flow of oil could drive up the costs of both crude and the gasoline refined from it, shaking up the politics of energy for Trump and his Democratic rivals. Moves in oil are often followed shortly by shifts in gasoline prices — and motorists frequently hold presidents and other politicians in power accountable for increases.