President Donald Trump is cautioning against oil price hikes and urging his administration to increase domestic oil production in the wake of the U.S. attack on Iran over the weekend.
Trump signaled Monday that he’s wary of rising oil prices that spiked Sunday after the U.S. military attacked nuclear sites in Iran. Prices had dropped again Monday. And with Americans heading into the busy Fourth of July driving season, the president sought to publicly address concerns that soaring gasoline prices might follow.
“EVERYONE, KEEP OIL PRICES DOWN. I’M WATCHING! YOU’RE PLAYING RIGHT INTO THE HANDS OF THE ENEMY. DON’T DO IT!” Trump posted on the social media platform Truth Social.
The president also directed his Energy Department to “DRILL, BABY, DRILL!!! And I mean NOW!!!” Energy Secretary Chris Wright replied to Trump, “We’re on it!”
The looming uncertainty over oil prices following the bombing of Iran presents a potential political liability for the president, who campaigned on driving down energy costs for Americans. Trump’s public pronouncements mark attempts to calm consumers and influence prices, but presidents are limited in their ability to sway global oil markets.
“There’s no switch at [the Energy Department] that allows you to put more rigs on the ground or pull more oil out of the ground,” said Jeff Navin, partner and co-founder of Boundary Stone Partners who served at DOE during the Obama administration. “Those decisions are almost entirely based upon the price of oil that is set globally.”
DOE does not regulate oil and gas drilling. The department supports energy research and manages the Strategic Petroleum Reserve, which the administration could draw from in the event of increased prices.
The department did not immediately respond to a request for comment about Trump’s directive.
“Since day one, President Trump has championed domestic energy production to strengthen American economic security, and he continues to urge the administration to ‘DRILL, BABY, DRILL’ and keep prices low,” White House spokesperson Harrison Fields said in an email. “As the President said, producers must keep oil prices down or risk playing into the hands of the enemy.”
‘The big question’
One major factor that could send oil prices soaring, according to experts, is whether Iran will move to close the Strait of Hormuz, a key shipping passage for oil exports.
“That’s the big question,” said Paul Bledsoe, a professorial lecturer at American University and a former Clinton White House official.
“Are they going to try to choke off oil supplies to the global markets and inflict pain? That’s the biggest risk so far. There’s not a lot of indication that that could happen,” Bledsoe said.
Keeping the strait open “is going to be absolutely critical for the global price” of oil, Navin said.
“The U.S. is not going to be able to absorb any substantial loss of oil coming through that region in the near term, or even in the medium term. That balance of whether or not this conflict with Iran escalates into a regional conflict — that’ll be a big difference,” he said.
If the conflict is “essentially over or close to over, and it’s contained and stays within Iran, I think you’ll see the prices of oil come down relatively quickly,” Navin said.
Meanwhile, Trump’s public pronouncements signal that he’s attempting to assert control over what could be a politically precarious situation.
“He’s been around the block long enough to know that this is not something the Energy Department can control,” Navin said. “He doesn’t have a dial. Chris Wright doesn’t have a dial. [Interior Secretary] Doug Burgum doesn’t have a dial to turn oil production up or down.”
But, Navin said, “The political need to show voters that you understand their pain and you’re taking this seriously and using whatever tools that you have at your at your disposal is important.”
