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NBC News
13 hours ago
- Business
- NBC News
Oil prices jump following U.S. strike on Iranian nuclear facilities
Oil prices jumped and stock futures slipped Sunday evening, indicating concern among investors about the possibility of economic fallout from the ongoing unrest in the Middle East following U.S. strikes against Iran's nuclear facilities. The major focus is on oil. Iran remains a major international oil supplier, and it also sits on the Strait of Hormuz, a heavily trafficked waterway in the Persian Gulf that is a key transit channel for about one-fifth of the world's oil supply. Concerns centered on whether Iran would begin limiting or shutting down access to the strait. U.S. Secretary of State Marco Rubio said in a statement that closing the strait would be tantamount to 'economic suicide' for Iran and called on China, Iran's top trading partner, to head off any attempt by Iran to affect traffic. U.S. and global oil benchmark prices opened up 4% Sunday evening, underscoring the concerns about what the conflict means for the world's oil supplies. Oil prices already gained about 3% last week in the wake of Israel's initial strikes against Iranian targets and Iran's retaliatory missile attacks. Stocks also slid Sunday. S&P 500 futures contracts declined about 0.6% in the first hour of trading, while Dow Jones Industrial Average futures fell about 250 points, or 0.6%. Nasdaq 100 futures dropped 0.7%. U.S. markets officially open at 9:30 a.m. ET Monday. 'Should oil exports through the Strait of Hormuz be affected, we could easily see $100 oil' or an increase in U.S. gas prices by 75 cents per gallon, Andy Lipow, president of the consulting firm Lipow Oil Associates, said in a note to clients Sunday. In a worst-case scenario in which oil prices rose to at least $120 a barrel, U.S. gas prices would increase as much as $1.25 per gallon, Lipow said. In a follow-up email, Lipow said that even if the strait does not officially close, any action by a tanker company to pre-emptively reduce its footprint there represents 'a de facto supply disruption.' Iran's state-owned media reported that Iran's parliament backed closing the strait — but that the final decision lies with Iran's national security council, according to the report. Any move by Iran to alter traffic in the strait could also hurt its own economy — particularly commerce with China. On Sunday, a department of the U.K. Royal Navy said it observed 'electronic interference in the Strait of Hormuz.' At least two massive supertankers that had entered the strait were reported to have made U-turns. Marine tracking websites also showed the vessels turning about halfway through the strait. 'I encourage the Chinese government in Beijing to call them about that, because they heavily depend on the Straits of Hormuz for their oil,' Rubio said in an interview on Fox News. China is Iran's most important oil customer, and they maintain friendly relations. Iran may still be assessing the ultimate damage to its nuclear facilities as it contemplates its next move. The International Atomic Energy Agency said Sunday that while it had confirmed that the Fordo, Natanz and Isfahan sites had been hit, it was not immediately possible to assess the damage at the Fordo site. Until last week, U.S. stocks had been enjoying a substantial, if volatile, recovery from the lows following President Donald Trump's reciprocal tariffs announcement in April. That momentum reversed after Israel announced last weekend it had struck key Iranian military and nuclear targets, prompting retaliatory missile strikes on Israeli targets by Iran. JPMorgan analysts said Sunday that investors had voiced concerns to them last week that the Iran-Israel conflict would spread, 'and those concerns have been materialized.' 'Trump's statement that this might be the only US attack or might begin a series of attacks brought us little certainty,' the analysts added in a note to clients. 'Moreover, we do not see an obvious route to a political settlement to the military conflict, which makes us think the conflict, like the one in Gaza, could last longer than many investors think.'
Politico
13-06-2025
- Business
- Politico
‘The White House should be worried': Oil prices soar after Israel's attack on Iran
Israel's attack on Iran has President Donald Trump facing the prospect of the same economic nightmare that helped unravel Joe Biden's presidency — rapidly spiking energy prices triggered by a war outside his control. The series of airstrikes that began Thursday night caused the world benchmark oil price to jump to $73 a barrel as of noon Eastern time Friday, up $8 since early Wednesday, with the promise of more price hikes to come if the fighting spreads. Energy analysts said the price could shoot to $100 a barrel — a level not seen since the aftermath of Russia's invasion of Ukraine in 2022 — if the conflict widens and interrupts oil shipments from the Middle East. No matter how the fighting unfolds, it promises to increase prices at American gasoline pumps just as voters' natural gas and electricity bills are already set to rise. And it comes at a time when Trump may have fewer tools at his disposal than Biden did to blunt their impact. Gasoline prices could jump as much as 25 cents a gallon in the coming weeks because of the fighting, predicted Patrick De Haan, a gasoline market analyst at the pricing website Regular gasoline prices averaged $3.13 a gallon Friday. Trump, who campaigned heavily last year on cutting energy prices, has started complaining publicly about the global markets not comporting with his priorities. During a bill signing ceremony Wednesday, Trump chided Energy Secretary Chris Wright over this week's rise in oil prices, which had begun climbing amid news of a possibly imminent Israeli attack. 'I was going to call and really start screaming at you,' Trump told Wright. Every White House knows that presidents of either party suffer when higher gasoline prices beset voters. And Trump could be particularly vulnerable if a significant rise in fuel prices triggers the sort of economic slowdown that analysts have warned his tariffs could bring. 'Geopolitical price spikes pose a bigger risk of recession than inflation in my view,' said Bob McNally, who heads the energy and geopolitical analysis firm Rapidan Energy and served on the National Security Council and National Economic Council during the George W. Bush administration. 'The White House should be worried.' Trump still has headroom for any rise in pump prices resulting from the Israel attack. Friday's average gasoline price was down 33 cents from a year ago and $1.88 from their all-time high in June 2022, according to AAA. But if the fighting spreads, things could get politically hot for Trump quickly. If Israel targets Iran's oil fields or export facilities, prices could rise another $7.50 a barrel, said Andy Lipow, head of the market analysis firm Lipow Oil Associates. If Iran then attacks the Strait of Hormuz at the mouth of the Persian Gulf — a major waterway for oil exports out of the Middle East — 'we could see $100 oil,' Lipow said. 'Iran knows full well that President Trump is focused on lower energy prices,' Lipow said in an email. 'Actions by Iran that impact Middle Eastern oil supplies raising gasoline and diesel prices for Americans are politically damaging to the president.' Worryingly for the White House, Trump can do little to tamp down prices. The president's only real option include using his bully pulpit and diplomats to try to persuade Israel and Iran to quell the fighting soon. He could also tell Wright to release oil from the Strategic Petroleum Reserve, hoping that unleashing a gusher of crude into the global markets will keep the price under control. Biden took that step in a big way after Russia's Ukraine invasion, selling off more than 40 percent of the stockpile in a move that Republicans blasted as a politically minded misuse of a reserve meant for national emergencies. But the reserve is still considerably smaller than it was pre-Biden, leaving Trump with less oil to release without depleting it. The reserve had 402 million barrels as of last week, down from 626 million barrels four years ago. A DOE spokesperson maintained that the administration was lowering prices by cutting regulations. 'While oil prices are dictated by supply and demand, the Trump administration is reducing regulatory costs and removing red tape holding back energy production, delivering lower energy costs for the American people,' Andrea Woods said in an email. Before this week, oil prices had fallen nearly $20 a barrel below where they were when Trump reentered the White House Jan. 20 — though the biggest drop came after Trump announced his 'Liberation Day' tariffs in early April, which triggered fears of a worldwide economic slowdown and threw energy demand into doubt. The oil producing countries in OPEC also boosted their own output earlier this year, further lessening prices — until now. At the moment, the hike in oil prices seems to have stalled, said Tamas Varga, an analyst at the brokerage firm PVM Oil Associates, and they could come back down if the fighting settles. 'Given that the situation is fluid it would not be surprising to see prices remain stable ahead of the weekend,' Varga said in an email. 'Next Monday, however, there is a chance of a significant retracement provided the situation is contained. If there is no tangible supply shock, the current rally will not be maintained.' The low prices the White House started with may help blunt voter's anger at rising prices, said Kevin Book, director at analyst firm ClearView Energy. But that doesn't mean Trump can be complacent, given his campaign promises. 'Politically, that offers Trump some headroom,' Book said. 'But, of course, Trump didn't campaign on keeping energy costs the same. He campaigned on bringing them down.'
Yahoo
08-04-2025
- Business
- Yahoo
Gas prices could fall as crude oil prices drop, expert says
WASHINGTON - One expert says there is one "silver lining" from crude oil prices dropping to their lowest level in four years. In the wake of President Donald Trump announcing tariffs on U.S. trading partners, U.S. crude futures fell below $60 per barrel Monday morning. As of Tuesday morning, they are just under $61 a barrel. That's down over $10 per barrel over the last three days. The price of crude oil is the largest factor in the retail price of gasoline, making up more than half of the total cost consumers pay at the pump. What they're saying "The silver lining from the recent market turmoil is that the significant decline in oil prices will lead to a decline in gasoline prices for the consumer," Andy Lipow, president of Lipow Oil Associates, told FOX Business. Even as more expensive summer gas prices start to hit consumers, Lipow said they won't see the impact due to the significant drop in crude prices. Phil Flynn, a Futures Group senior analyst, told FOX Business that while crude and gasoline prices don't always drop linearly, the decrease in crude oil prices should offset the typical 10- to 15-cent gallon increase consumers typically see in the summer. Consumers "could see the cheapest summer for gasoline prices since President Trump was in office or since COVID," according to Flynn. When could gas prices start dropping? Lipow estimates as soon as this week, with a decline of 15 cents per gallon over the coming weeks. The Source This story includes reporting from FOX Business.
Yahoo
13-03-2025
- Business
- Yahoo
Gasoline prices are coming down. But Trump's drill-baby-drill promises are not the reason
Gasoline prices are coming down, and President Donald Trump is happy to take credit for that. But he has little to do with it, experts say, and his policies could make it more expensive to increase domestic oil production from already record levels. The price of a barrel of West Texas Intermediate, the benchmark used for US crude oil, is at $66.71, down 11% from the day after Trump took office. Gasoline prices haven't fallen as fast, but they are approaching $3 per gallon. The national average for a gallon of regular stands at $3.08, according to AAA, down about 2% from when Trump took office but nearly 10% from a year ago. 'A very big thing that I'm very happy with is oil is down,' he said in remarks in the Oval Office on Wednesday. 'We're getting that down. When energy comes down, prices are going to be coming down with it. So in a very short period of time, we've done a very good job.' And the rest of the presidential administration has been eager to back up his claims, with White House senior counselor Peter Navarro saying that Trump's policies caused the price drop. 'In this case, it's 'drill, baby, drill,'' Navarro told CNN this week, using one of Trump's campaign slogans. He predicted that oil prices could fall to as low as $50 a barrel. But the United States was already producing more oil than any other country before Trump took office. That record production level doesn't appear to be moving much higher, even with the new administration's pro-drilling policies. The Energy Information Administration (EIA) is forecasting an average daily production of 13.5 million barrels of oil in 2025, up 200,000 barrels a day from 2024. But that pace was reached during the last three months of Joe Biden's presidency. 'The EIA is showing that production is now plateauing at the level we hit in the fourth quarter,' said independent oil analyst Andy Lipow. The EIA's forecast for 2026 is for only a narrow increase to 13.6 million barrels a day. And even then, Lipow said, that domestic production is not the thing that's driving prices lower. The recent drop in prices is due to a classic imbalance between supply and demand, rather than expectations for a Trump-fueled surge in domestic oil production, Lipow said. OPEC+, a group of major oil-exporting nations, announced plans earlier this month to increase production over the next 16 months. And there are signs of weak demand for oil on the horizon, especially in China, Lipow said. But if the price of oil drops significantly, it could end up slowing production altogether, Lipow added, because American oil producers can't make a profit on oil that's too cheap for their balance sheets, let alone anywhere near Navarro's $50 price target. 'From a producer perspective, they need prices closer to $70 a barrel,' Lipow said. Trump's promises to slash oil industry regulations could lower the price that producers need to break even, but not enough to spur production. And Wednesday's tariffs on foreign steel imports are likely to increase costs for producers, Lipow said, 'Drill baby drill is going to be offset by rising costs, especially the steel used at the oil well,' he said. Even domestic steel prices are likely to rise, as American steel companies take advantage of decreased competition. Overall US spot steel prices are up more than 30% in the last two months in anticipation of the impact of tariffs, said Phil Gibbs, steel analyst at KeyBanc. A CNN poll released Wednesday shows a majority of Americans now disapprove of Trump's handling of the economy, and an even greater percentage say he's not doing enough to address the high prices that helped him win last year's presidential election. Wednesday's Consumer Price Index report, the government's key measure of inflation, showed lower gas prices are helping to cool overall price pressures. But there are fears by many consumers, economists and businesses that Trump's tariff policies could spur additional price hikes soon. Lipow said recession fears — which have been blamed for much of the recent plunge in stocks — probably aren't driving oil lower yet. That's partly because oil is traded globally, not just based on one country's demand. But if there are signs of a slowing American economy, or the actual start of a US or global recession, that would send gasoline prices down quickly and sharply. The 2020 recession sparked by the Covid-19 pandemic as well as the Great Recession of 2008 and 2009 resulted in steep drops in gasoline prices. 'If we get the bad news that we're going into a recession, the good news would be that the national price will drop below $3 a gallon,' Lipow said.
CNN
13-03-2025
- Business
- CNN
Gasoline prices are coming down. But Trump's drill-baby-drill promises are not the reason
Gasoline prices are coming down, and President Donald Trump is happy to take credit for that. But he has little to do with it, experts say, and his policies could make it more expensive to increase domestic oil production from already record levels. The price of a barrel of West Texas Intermediate, the benchmark used for US crude oil, is at $66.71, down 11% from the day after Trump took office. Gasoline prices haven't fallen as fast, but they are approaching $3 per gallon. The national average for a gallon of regular stands at $3.08, according to AAA, down about 2% from when Trump took office but nearly 10% from a year ago. 'A very big thing that I'm very happy with is oil is down,' he said in remarks in the Oval Office on Wednesday. 'We're getting that down. When energy comes down, prices are going to be coming down with it. So in a very short period of time, we've done a very good job.' And the rest of the presidential administration has been eager to back up his claims, with White House senior counselor Peter Navarro saying that Trump's policies caused the price drop. 'In this case, it's 'drill, baby, drill,'' Navarro told CNN this week, using one of Trump's campaign slogans. He predicted that oil prices could fall to as low as $50 a barrel. But the United States was already producing more oil than any other country before Trump took office. That record production level doesn't appear to be moving much higher, even with the new administration's pro-drilling policies. The Energy Information Administration (EIA) is forecasting an average daily production of 13.5 million barrels of oil in 2025, up 200,000 barrels a day from 2024. But that pace was reached during the last three months of Joe Biden's presidency. 'The EIA is showing that production is now plateauing at the level we hit in the fourth quarter,' said independent oil analyst Andy Lipow. The EIA's forecast for 2026 is for only a narrow increase to 13.6 million barrels a day. And even then, Lipow said, that domestic production is not the thing that's driving prices lower. The recent drop in prices is due to a classic imbalance between supply and demand, rather than expectations for a Trump-fueled surge in domestic oil production, Lipow said. OPEC+, a group of major oil-exporting nations, announced plans earlier this month to increase production over the next 16 months. And there are signs of weak demand for oil on the horizon, especially in China, Lipow said. But if the price of oil drops significantly, it could end up slowing production altogether, Lipow added, because American oil producers can't make a profit on oil that's too cheap for their balance sheets, let alone anywhere near Navarro's $50 price target. 'From a producer perspective, they need prices closer to $70 a barrel,' Lipow said. Trump's promises to slash oil industry regulations could lower the price that producers need to break even, but not enough to spur production. And Wednesday's tariffs on foreign steel imports are likely to increase costs for producers, Lipow said, 'Drill baby drill is going to be offset by rising costs, especially the steel used at the oil well,' he said. Even domestic steel prices are likely to rise, as American steel companies take advantage of decreased competition. Overall US spot steel prices are up more than 30% in the last two months in anticipation of the impact of tariffs, said Phil Gibbs, steel analyst at KeyBanc. A CNN poll released Wednesday shows a majority of Americans now disapprove of Trump's handling of the economy, and an even greater percentage say he's not doing enough to address the high prices that helped him win last year's presidential election. Wednesday's Consumer Price Index report, the government's key measure of inflation, showed lower gas prices are helping to cool overall price pressures. But there are fears by many consumers, economists and businesses that Trump's tariff policies could spur additional price hikes soon. Lipow said recession fears — which have been blamed for much of the recent plunge in stocks — probably aren't driving oil lower yet. That's partly because oil is traded globally, not just based on one country's demand. But if there are signs of a slowing American economy, or the actual start of a US or global recession, that would send gasoline prices down quickly and sharply. The 2020 recession sparked by the Covid-19 pandemic as well as the Great Recession of 2008 and 2009 resulted in steep drops in gasoline prices. 'If we get the bad news that we're going into a recession, the good news would be that the national price will drop below $3 a gallon,' Lipow said.
