“There’s a day of reckoning coming.”
That is the opinion of a prominent oil industry executive who is predicting a major surge in prices at the gas pump as Donald Trump’s war on Iran, and the accompanying closure of the Strait of Hormuz, drags on.
As oil prices surge and supply dwindles globally, energy experts predict a catastrophic price shock that could decimate Republican chances in the midterms, reports Politico’s Scott Waldman and Eli Stoklos. According to Dan Pickering, chief investment officer at Pickering Energy Partners, when summer driving season begins, gas prices will deliver a shock that “hits people in the face.” “It will be painful because I can tell you that the stock market’s ignoring this,” he said. The timing will likely be politically toxic, the report notes, with another spike in prices predicted around Memorial Day potentially dealing a fatal blow to Republican chances for holding onto the House next year, as Americans’ confidence in the economy continues to drop. A senior administration official dismissed expert warnings about the looming crisis, telling Politico: “Everyone feels like we can hopefully get back to even lower prices at the gas pump. That’s always the goal. So everyone is very sober about the uptick in gas prices, but everyone feels confident that we can get it down before the end of the year.” Rosemary Kelanic, director of the Middle East Program at the Defense Priorities think tank, isn’t buying the White House spin, and suggested Trump’s optimistic messaging is backfiring. “By talking down the market so effectively, when the price spike becomes inevitable, it’s going to hurt way worse because we’ll have lost weeks or even months of time where producers could have been ramping up output,” she told Politico. There are also oil industry complaints about Trump’s optimistic spin on the crisis. Oil and gas executives are openly frustrated with Trump’s market-manipulating rhetoric,” the report notes with one insider complaining that the president “sends conflicting signals to operators who cannot plan rigs and capital budgets when prices swing wildly based on tweets.”
“Our hypothesis is [that] the paper market is being manipulated. This will likely lead to an even worse supply and demand imbalance and higher prices in the medium term (next 12 months),” the executive added.
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