Skyrocketing Gas Prices Threaten Political Order Across the Globe
While energy prices stayed steady in February, the numbers show that they were already on the rise even before the United States waged war on Iran. As the Strait of Hormuz begins its third week of closure to its myriad political adversaries, extending what was already the single largest disruption to global oil trade in history, we can expect to see skyrocketing energy prices over the coming weeks and months. And that means that we can expect political disruptions that last a whole lot longer.
As the United States and Israel continue a bombardment of missile strikes across Iran, the Iranian Foreign Minister Abbas Araghchi says the Strait of Hormuz “is open, but closed to our enemies, to those who carried out this cowardly aggression against us and to their allies.” The Strait of Hormuz is an essential throughway for global oil flows, accommodating one-fifth of the world’s oil and gas trade on a typical day.
But these are not typical days. Donald Trump is trying to mount pressure on the United States’ allies in Europe and NATO to band together an offensive to force the reopening of the Strait to global oil trade, but so far allies have shown little to no interest in such an approach. Trump has even reached out to China’s Xi Jinping to help with the offensive, but Beijing will likely also be slow to respond to such a call, as China is better prepared for an energy crisis than any other nation on Earth and has continued to receive oil through the Strait even as the war wages on.
Oil prices are historically a major factor in elections and in constituent satisfaction with leadership. And if the war in Iran has shown us anything, it’s that oil is still king when it comes to geopolitical power. “The post-oil world remains far in the future,” David Sandalow, a fellow at Columbia University’s Center on Global Energy Policy, recently told the New York Times. “We’re in the early to middle stages of an energy transition, but energy transitions take time.”
The potency of oil supplies as a weapon of war – and as a political tool – is evident. And this month’s energy price crisis has already set in motion global political turbulence that we will be feeling for years to come, in ways both big and small. Donald Trump has built much of his platform on promises of cheap and abundant coal, oil, and gas and doubling down on the United States’ role as a global fossil fuels superpower. This means that soaring prices at the gas pump could spell major trouble for his administration and for the Republican party as a whole, especially when it comes to the coming midterm elections this fall.
“The administration’s foreign policy actions have collided directly with the affordability message Republicans are trying to cement ahead of the election,” Heidi Crebo-Rediker, senior fellow at the Council on Foreign Relations and former Obama administration economist, was recently quoted in a report from nonpartisan news outlet Semafor.
And the potential political disruption is not limited to the United States. A problem in the Strait of Hormuz is a problem for the whole world and for its leaders. “Brazil, Nigeria, France, and other countries that already struggled with inflation also have federal elections upcoming in the next year or two, making Trump’s decision to bomb Tehran a political liability for many other world leaders,” reports Semafor. European leaders are also facing a serious budget crisis as the European Union still struggles to shrug off its last energy crisis, brought on by Russia’s continued war in Ukraine and resulting energy sanctions.
The Trump administration has tried to reassure voters that gas prices will come down in the coming weeks, but even Trump’s Energy Secretary Chris Wright has admitted that there are “no guarantees.”
By Haley Zaremba for Oilprice.com
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