Israel may be shattering Trump's energy price pledge
Israel's stunning attacks on Iran's nuclear program and military leadership are embroiling the Middle East in another deadly war — and could imperil President Donald Trump's pledge to slash oil prices for American consumers.
The bombings that began Thursday and continued into Friday targeted Iran's uranium-enrichment facilities and killed several of the country's top military leaders and scientists. Iranian Supreme Leader Ayatollah Ali Khamenei vowed revenge. And meanwhile, the strikes sent shock waves through energy markets.
Oil is still cheaper than it was a year ago. But Trump faces the prospect of the same economic nightmare that helped unravel Joe Biden's presidency, Ben Lefebvre reports. The world benchmark oil price was around $74 a barrel late this afternoon in Washington, up $8 since early Wednesday. Energy analysts said a dire escalation of the crisis, such as an attack on the Strait of Hormuz, could send the price to $100 a barrel.
No matter how the fighting unfolds, Ben writes, gasoline prices are likely to increase just as voters' energy bills are likely to go up during the summer months.
That's at the very least politically inconvenient for a president who had promised to bring down the 'price of everything,' including fuel for Americans' cars.
What comes next: U.S. presidents have a poor track record when it comes to influencing global oil markets, especially during times of war. And Trump may have even fewer tools at his disposal than Biden did to blunt the impact of rising prices.
For one thing, the U.S. Strategic Petroleum Reserve is smaller than it was four years ago, before the Biden administration released nearly half its oil into the market to blunt rising prices following Russia's invasion of Ukraine. Plus the emergency oil stash needs more than $100 million in infrastructure repairs, Shelby Webb reports.
If Iran's retaliation against Israel includes disrupting oil flows or attacking regional energy infrastructure, 'we could see a significant supply shock with oil prices rising sharply,' Jorge León, an analyst with Rystad Energy, said in a statement.
Some analysts urged caution, though. Pavel Molchanov with Raymond James said the historical track record between Israel and Iran suggests both sides want to avoid all-out war. The two countries exchanged missile strikes twice last year, but avoided escalation.
'Assuming that restraint similarly prevails this time, oil prices should subside quickly, which would limit the impact on the global economy,' Molchanov said in a statement.
But Israel may have some decidedly unrestrained goals for this sustained assault, such as toppling Iran's regime, POLITICO's Nahal Toosi wrote in her column this afternoon. Tehran called the attack a 'declaration of war' and said the country would respond 'decisively and proportionally.'
Thank goodness it's Friday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net.
Today in POLITICO Energy's podcast: Alex Guillén breaks down why the Environmental Protection Agency's rationale for rescinding a Biden-era climate rule for power plants may be on shaky legal ground.
Spotlight
Postcard from an American enclave surrounded by Canada and water:The only way to reach the Northwest Angle of Minnesota without driving through Canadian customs is via prop plane, boat or — during ice fishing season — by snowmobiling more than an hour across a massive lake.
Corbin Hiar delivers this report from the fishing paradise to understand how Trump's tariffs and Canada's ire with the United States are affecting the lives of this tiny, 150-person enclave.
Power Centers
EPA documents contradict ZeldinEPA Administrator Lee Zeldin said his efforts this week to repeal climate and mercury rules would prevent fossil fuel industries from vanishing, writes Jean Chemnick.
But EPA's own analysis that accompanied Zeldin's proposal shows that the rules he is targeting for repeal would not have changed the U.S. energy sector very much. For that reason, the agency's own analysis projected that the targeted climate rules would impose only modest costs on the electricity sector. In one case, the cost was nonexistent.
Ocean treaty comes into view — minus the U.S.The United Nations Oceans Conference in Nice, France, ended today with promises from world leaders to ratify a global, binding agreement to help protect the world's oceans, writes Leonie Cater. But don't count on the United States, which skipped the conference and declared the gathering 'at odds' with the Trump administration's views.
The commitment paves the way for the world's very first Conference of the Parties for a High Seas Treaty next year.
In Other News
Cancer Alley: A Tulane scientist resigned, citing a 'gag order' on environmental justice research.
Farewell: Gary England, forecaster who kept watch over Tornado Alley, died at 85.
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The White House is reviewing proposed rules from a host of federal agencies that would dictate how the government implements the National Environmental Policy Act, the nation's magna carta of environmental laws.
What to watch: The world's richest nations are gathering Sunday in the Canadian Rockies for a summit that could reveal whether Trump's policies are shaking global climate efforts.
The Trump administration proposed its first biofuel blending mandates on Friday, increasing volumes over the next two years to record levels but leaving open questions over exemptions from the mandates sought by small refiners.
That's it for today, folks. Thanks for reading, and have a great weekend!
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