From its inception, the Trump Administration has been the Oil Administration. From a flood of pro-drilling executive orders to appointing literal oil and gas executives to his Cabinet, a central goal of the president’s tenure has been to make more money for a small cadre of extremely rich friends — only, for the first few months, it hadn’t quite been going to plan. Oil prices had dropped down into the $50s per barrel, well below the threshold at which it is generally agreed that companies can make a profit on drilling a new well. The drilling revolution, the one that is so necessary in a country that already produces more oil and gas than any in the history of the world and exports loads of it, was apparently not forthcoming.
As the saying (probably) goes, time to bomb Iran. Oil prices jumped over the weekend after a few weeks of rise, peaking at around $78 per barrel. The leap is thanks to Trump’s harebrained and belligerent decision to jump in rogue state Israel’s ongoing campaign against, ostensibly, Iran’s nuclear capabilities; Iran has threatened to disrupt or cut off access through the Strait of Hormuz, through which around 20 percent of all the world’s oil and gas is shipped. The market is, obviously, uneasy.
In response to the oil price spike, Trump issued a classically absurd dictat, yelling on Truth Social: “EVERYONE, KEEP OIL PRICES DOWN. I’M WATCHING YOU.” He followed that up with a slightly more directed, if confusing, rant: “To The Department of Energy: DRILL, BABY, DRILL!!! And I mean NOW!!!”
It is not, of course, the DOE that does the drilling. That would be the Exxons and Chevrons out there, who now, incidentally, suddenly find themselves in world where those new wells may in fact be profitable once more. If they were to dramatically ramp up production, it could have the desired downstream effect of keeping gas prices low, which is the obvious theoretical justification for ordering everyone in sight to start drilling wells. If it makes those buddies of his rich too, well, just an ancillary benefit, to be sure.
This is not to say that Trump, sitting in the White House in May as oil prices cratered, schemed out an international conflict in order to grease the wheels for industry profits. As always, it is a better idea to skip the four-dimensional chess versions of his policy maneuvers in favor of the dumbest possible explanations: His birthday parade was a limp and semi-embarrassing bust, he thought Israel’s missiles looked cool on TV, and the various warmongers in his orbit pulled the right levers at the right time to get the Big Strong Boy into the mix. Were some of those warmongers aware of the potential change to the oil drilling landscape? Who can say.
None of this is set in stone yet, obviously, and oil companies are surely bottom line-focused enough to know that a temporary jolt to oil prices does not actually make every new well they can imagine a profitable enterprise. The war with Iran is, already, a shockingly unpopular move, and while no one should believe a word out of the administration there is at least some suggestion that they may not want to keep the bombing going for all that long. Iran may decide not to flex its full muscle in the Strait of Hormuz, which could send prices back down. Or Trump could see something else on television, forget what he said yesterday, contradict six Cabinet secretaries, and start a different war with another country entirely. The oil companies will be, undoubtedly, just fine.
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