U.S. President Donald Trump went into the Iran war convinced that America’s vast oil wealth would insulate the country from the kind of energy shock now battering much of the world…
U.S. President Donald Trump went into the Iran war convinced that America’s vast oil wealth would insulate the country from the kind of energy shock now battering much of the world. Four weeks into the conflict, that shield is looking fragile.
Trump’s wager has only partly paid off. U.S. oil prices have risen less sharply than those elsewhere since U.S.-Israeli air strikes against Iran on February 28 ignited a regional war that rapidly engulfed the Middle East’s energy infrastructure, blocking the Strait of Hormuz and cutting off roughly a fifth of global oil and gas flows.
Brent crude LCOc1, the global benchmark, has surged about 55% since late February to around $110 a barrel, while U.S. West Texas Intermediate CLc1 has climbed 50% to around $99. The divergence between the two benchmarks recently hit its highest in a decade, excluding a brief spike during the COVID-19 pandemic.
This gap reflects a structural shift in energy markets. The U.S. is now the world’s largest producer of oil and gas and exports more energy than it imports, thanks to the shale boom of the past 15 years. While U.S. refiners still import crude to optimise operations – including some Middle Eastern grades that
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