President Donald Trump returned to office last year promising to unleash fossil fuels to power U.S. energy production. But the Iran war has sparked months of persistently high gasoline prices, threatening GOP fortunes in the midterm elections, and Trump is now talking about reining in the industry. Oil companies are “making too much money” and should lower gasoline prices, he said to reporters earlier this month. Executives are nervous about a crackdown.
Oil industry officials are “rattled” by Trump’s “growing criticism of the sector,” said Politico. U.S. companies have profited from the Iran war, shipping American petroleum abroad to countries that have found their usual supplies cut off by the closure of the Strait of Hormuz. That has put “upward pressure” on domestic gasoline prices as U.S. car owners “compete with the rest of the world for a suddenly shrunken supply.” Industry executives are now worried Trump might cut off American oil exports, though the White House has denied that is in the offing. The industry remains on alert. “Everyone knows Trump’s gonna Trump,” an anonymous executive said to the outlet.
The law of supply and demand is “as fundamental as they come,” but Trump is “acting like he’s above the law,” The Washington Post said in an editorial. The president has taken aim at Chevron and ExxonMobil’s “windfall profits” of $12.1 billion and $14.5 billion, respectively, during the second quarter. They should “give some of that back to the public,” he said to reporters. But gasoline prices have risen so much over the last year because of “decisions made in Washington, not by the oil majors,” said the Post.
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The war is not Trump’s only inflationary policy. He has also imposed tariffs and “taken government stakes in private companies,” said the Post. Rather than criticize oil companies, the president “should focus on expanding the supply of oil at home and abroad.”
The war can be seen as the latest in a “history of handouts to the oil industry,” Jamie Friedman, Jenny Rowland-Shea and Alia Hidayat said at The Center for American Progress. Trump administration policies have made electric vehicles more expensive and gutted emissions standards for gasoline-powered vehicles, leaving Americans “more vulnerable to price spikes and gasoline dependency.” The way to bring gasoline prices down is to “stop the Trump administration’s reckless and unnecessary war in Iran.”
What next?
The Trump administration is considering several policies to expand production and bring down oil costs. The federal government has “fast-tracked an environmental review” for a proposed offshore fracking project off the coast of California, said The San Francisco Chronicle. The White House has also extended a waiver from shipping regulations to “keep fuel flowing amid the Iran war,” said CNBC. That move will “protect consumers from unnecessary price volatility,” American Petroleum Institute’s Kristin Whitman said in a statement.
