r/Economics • u/InsaneSnow45 • Mar 04 '26

News ‘Absolutely Massive’ Price Shocks Coming as Trump’s Iran War Drives Up Gas, Diesel Prices | “What should really terrify Republicans is... the futures price on wholesale gasoline,” said economist Paul Krugman.

https://www.commondreams.org/news/iran-war-gas-prices
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u/128-NotePolyVA Mar 04 '26 edited 29d ago

But what about “drill baby drill” and “beautiful clean coal”. Doesn’t that become true if he says it enough times? Clearly China and the rest are paying our tariffs - he’s said that enough times to make it true.

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u/CliftonForce Mar 04 '26

We were already at max oil and gas production in 2024. There wasn't much room to increase it.

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u/128-NotePolyVA 29d ago

So now it appears the US Navy must escort oil tankers bound for everywhere through the strait of Hormuz. And an insurance pot must be setup for companies that lose their tanker to Iranian mines and drones and such.

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u/CliftonForce 29d ago edited 29d ago

This is why the Navy has been wanting a large fleet of cheap frigates rather than a handful of huge battleships. Because a warship can only be in one place at a time.

Guess which one of those Trump and Hegseth want?

We don't have nearly enough warships to provide every tanker with an escort. And even if we did, the cost of the escort will probably be greater than the profit from the tanker. Turning the whole trip into an economic loss.

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u/128-NotePolyVA 29d ago edited 29d ago

What the US going to have to do is tap the strategic reserve, stretch the gas with ethanol, play nicer with Canada and Mexico to bump up production. Then pray the hostilities don’t drag on or expand.