Strange Economics of Mideast Oil Shield Trump From Iran’s Bite - Bloomberg:
A third of the world’s seaborne crude and fuels pass through the Strait of Hormuz at the mouth of the Persian Gulf. So it’s no surprise that as skirmishing in the Gulf between the U.S. and Iran has intensified this year, the price of oil has … wait … fallen?
Anyone betting that troubles in the area would push up the price of oil has lost a barrel of money. The prices of Brent crude and the U.S. benchmark, West Texas Intermediate (WTI), are each down about 26% from their highs of last October, which was before hostilities ratcheted up.
The stability of oil prices is fortunate for President Trump, who’s been able to tighten the screws on Iran without provoking an increase in gasoline costs that would be unpopular with voters. It’s also a plus for the global economy, which benefits from a reliable supply of affordable crude. Shocks to the supply of oil have been causes of global economic downturns in the past. Not so happy are the leaders of Iran, who are (still) hoping to get relief from Trump’s sanctions by making the U.S. and its allies feel some pain.
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