Iran War Shows Why Energy Security Means Using Less Oil

After hitting the Iranian nuclear establishments, US President Donald Trump turned into social media to express his deep concerns about oil prices, which increased by almost 20 percent of the pre -conflict level. Even before Iran’s reprisal strikes on an American base in Qatar, he called for an immediate increase in oil production and warned the industry against “maintaining oil prices”.

Politicians have been afraid of both main parties for a long time from the political and economic impact of the war on gasoline prices. But Trump’s warnings were noticeable that they were distinguished by a flagrant contradiction as he affirmed after Iran’s recent strike on the US bases, in January 2020, “We are independent, and we do not need Middle East oil.” Although oil prices have declined after a fragile ceasefire, the main lesson of conflict for two weeks must be the new situation of the United States as the largest oil producer in the world that does not make it “independent.”

After hitting the Iranian nuclear establishments, US President Donald Trump turned into social media to express his deep concerns about oil prices, which increased by almost 20 percent of the pre -conflict level. Even before Iran’s reprisal strikes on an American base in Qatar, he called for an immediate increase in oil production and warned the industry against “maintaining oil prices”.

Politicians have been afraid of both main parties for a long time from the political and economic impact of the war on gasoline prices. But Trump’s warnings were noticeable that they were distinguished by a flagrant contradiction as he affirmed after Iran’s recent strike on the US bases, in January 2020, “We are independent, and we do not need Middle East oil.” Although oil prices have declined after a fragile ceasefire, the main lesson of conflict for two weeks must be the new situation of the United States as the largest oil producer in the world that does not make it “independent.”

Just one month ago, oil prices fell to these low levels, about $ 60 a barrel, and oil executives warned against the end of the US rock oil mutation, even when Trump promised “to launch” local production. When the rockets have flew back and forth across the Middle East in recent weeks, prices have risen to nearly $ 80 a barrel. Experts predicted that gasoline prices may rise by 20 cents to 30 cents for gallons-before returning later near pre-conflict levels when the fighting subsides.

The fact is that the best way to protect drivers and companies from inevitable prices is to use less oil, not just produce more. However, the republican plans will eliminate incentives and regulations that will enhance energy security in the United States by curbing oil demand, which continues to rise every year in the country.

In the past two decades, the United States has moved from importing 60 percent of its use of oil to be a clear source – an unprecedented transformation. In response, many experts and policy makers expressed their feelings, similar to those achieved by Trump, that the United States achieved the long -awaited goal of energy independence and no longer needs to be concerned about the risks belonging to the Middle East or other oil supplies.

Indeed, the rock revolution has brought many economic and geopolitical benefits to the United States and has helped reduce oil prices in recent years, including during the current conflict. However, independence is a legend. Oil and gasoline prices are still in the global market. Although the United States is no longer a net oil importer (in fact, the United States alike and export large quantities), the prices in the pump still rise to drivers in the United States if oil supplies are disrupted in the middle of the road around the world.

Moreover, when these nails occur in prices, there is a lower pillow today to deal with this economic pain. Unexpectedly, congress has sold many of the storage of strategic oil reserves in the United States in recent years in response to a misunderstanding that low imports made the country less vulnerable to volatile global markets and geopolitical risks. The Biden Administration also released large quantities of strategic oil stocks after Russia invaded Ukraine, although Russian oil supplies have not dominated largely.

In addition, the ability of shale oil growth in the United States to compensate for display losses elsewhere is the shadow of its previous self. Production is expected to grow barely this year – or perhaps even decrease – low prices and geological exhaustion in rock formations. According to a survey issued by Dallas Federal Reserve, nearly half of the oil executives are now planning to dig more wells than they did when Trump took office for his second term.

Certainly, being a clear source means that the negative effects of high oil prices on the macroeconomic economy are more complete because more increased consumer spending flows to producers in the United States instead of abroad. However, companies and consumers are still shocked. This explains why Trump used his first major speech as president this year to invite Saudi Arabia and other members of OPEC to reduce oil prices, despite the new “independence” of the United States of oil imports.

As long as oil and gasoline prices are determined in the world, real energy security will only come from less use, and not only produce more. Unfortunately, Congress and management move in the opposite direction. The huge taxes and spending bills that approved both the Senate this week and the House of Representatives in May, will end the tax credits to buy electric cars and federal spending for infrastructure for charging electric cars. The Trump administration also moves to cancel stronger criteria for fuel -consumption and vehicle emissions standards. On the contrary, nearly half of the new cars that were sold in China this year will be electricly – as a result of Beijing’s continuous effort to reduce their dependence on oil for national security reasons.

Tensions in the Middle East seem to have eased, at least at the present time. However, with uncertainty about the state of Iran’s stocks in very fertilized uranium, it can be easily heated. Even if this crisis ends, there will be others. While politicians may breathe a sigh of pumps today, the Congress and the Trump administration must double their efforts to prepare for the next inevitable crisis. The best way to do this is to reduce the US dependence on oil, regardless of its source.