Donald Trump

Donald Trump said on Sunday that oil prices would 'drop rapidly' once what he called the destruction of Iran's nuclear threat was complete, after crude rose past $100 a barrel as war in the Middle East disrupted supply routes and energy output across the Gulf. In a Truth Social post reported by Mediaite, Donald Trump described the short-term price spike as 'a very small price to pay' for safety and peace, adding, 'ONLY FOOLS WOULD THINK DIFFERENTLY!'

For context, the market shock did not come out of nowhere. The BBC reported last week that oil had already hit a two year high after Qatar's energy minister warned that Gulf oil and gas exporters could be forced to stop production within days if the conflict persisted, with Qatar itself having halted LNG production because of what it described as 'military assaults' on its facilities.​

Why Donald Trump Is Dismissing the Oil Shock

Trump's public line is simple: higher prices now, lower prices later. It is a neat political message, though one that asks motorists and businesses to accept a fairly brutal short-term squeeze on the promise that the turbulence will pass.

Speaking about the US response, Trump also played down talk of tapping the Strategic Petroleum Reserve. Fortune reported that, aboard Air Force One, he told reporters, 'We've got a lot of oil. Our country has a tremendous amount,' before adding, 'There's a lot of oil out there. That'll get healed very quickly.'​

That optimism sits awkwardly beside what is happening in the region itself. CNBC reported that crude briefly blasted past $100 at the open of trading on Sunday evening as traders reacted to the widening war and the risk to shipping through the Strait of Hormuz, one of the world's most sensitive energy chokepoints.​

The strain is no longer theoretical. Reuters reported that Kuwait Petroleum Corporation began cutting crude output and refining operations on Saturday as a precaution tied to the regional conflict, though it did not say how deep the reductions were. The company had been producing about 2.6 million barrels of crude a day in February, according to the same Reuters report.​

What Donald Trump Cannot Easily Brush Aside

Iraq's position is even more severe. Reuters said production from the country's main southern oilfields had fallen by 70% to 1.3 million barrels per day because Iraq was unable to export through the Strait of Hormuz during the Iran war. Before the conflict, those same fields had been producing around 4.3 million barrels a day.​

That is the awkward arithmetic behind the president's insistence that the market will sort itself out. When major producers start curbing output, and when exporters warn that more shutdowns could follow within days, price spikes stop looking like a passing tantrum and start looking like the cost of a system under real stress.

There is also a wider economic shadow. Reuters reported that Qatar's energy minister, Saad al Kaabi, warned that if the war drags on, all Gulf energy producers may have to halt exports within weeks and oil could climb as high as $150 a barrel. He also said prolonged conflict would hit global GDP and create shortages that ripple into manufacturing.​ None of that proves Trump is wrong to argue the shock may prove temporary.

Markets can overshoot, and wartime pricing often carries a thick layer of fear. Even so, his language has a familiar impatience to it, as though calling critics 'fools' might settle an argument that is plainly still unfolding in tanker routes, export terminals and refinery balances.

For now, the most defensible reading is the narrow one. Oil has surged above $100, Gulf producers are already cutting or halting output, and the White House is betting that military success will calm the market before the economic damage deepens. That is a wager, not a settled fact, and consumers are being asked to live inside it while the numbers keep moving.

Originally published on IBTimes UK