By Peter St. Onge, The Daily Signal | October 11, 2024
With the Katrina-level federal incompetence in North Carolina, The New York Times is panicking that “economic turbulence” could sink Vice Presidential Kamala Harris‘ presidential campaign, handing the nation to MAGA fanatics who want to seize the federal government and make it leave you alone.
The article laments that we’re seeing October surprises, but the wrong kind of surprises for The New York Times‘ liking.
So, instead of wall-to-wall coverage by salivating left-wing journalists of Donald Trump’s banter, The New York Times is worried we’re getting a war in the Middle East that could send oil prices soaring and a port strike that threatened to “cripple” the economy. Already, two hurricanes have revealed in horrifying detail how rotted-out our America-last federal government has become.
The Times laments, more in anger than in sorrow, how all of these unlucky breaks are hitting just when “American policymakers were gaining confidence they had successfully tamed inflation.”
They’re particularly worried about oil, since politicians have known for a generation that gas prices make or break an election.
I’ve mentioned in recent videos how oil prices had been coming down because of the looming recession. Recessions can cut oil prices in half, since less stuff is being produced and people stop driving.
Indeed, just in the past three months, oil prices had dropped from $86 a barrel to just $66 as jobs numbers trumpeted the coming recession. But all that changed on Oct. 1, when Iran launched nearly 200 missiles at Israel over the Hezbollah offensive, sending oil prices soaring more than 8% in a matter of days.
Why did oil soar? Because one thing the Ukraine war showed us is, it’s really easy to destroy energy infrastructure, even for a Third World military like Ukraine‘s.
Meaning, Israel could turn off Iranian oil exports at will.
Now, on paper, Iranian oil exports are large, but not that large. Formally, it’s No. 16 in the world at 900,000 barrels per day, just ahead of the United Kingdom.
But that 900,000 is just a fraction. Last year, Bloomberg estimated that Iran actually exports over 3
million barrels, most of it illicit to get around U.S. sanctions.
That would put Iran at No. 6 in world exports, at just under half of what Saudi Arabia exports.
Of course, it’s not just Iran. The country of Iraq exports even more oil, and it has, thanks to the U.S. invasion that empowered Shi’ite militias become deeply aligned with Iran.
Iraq is staying out of the fight for now, but if that changes—perhaps because Iraqi popular opinion forces it—we could be looking at a Saudi Arabia worth of oil coming offline.
The last time something similar happened was during the 1990 invasion of Iraq, which drove oil prices from $41 to $94 per barrel. The fun doesn’t stop there, because any war with Iran probably means they close the Persian Gulf by blocking the narrow Straif of Hormuz.
That could, in theory, deliver something closer to the 1970s oil embargo, when inflation-adjusted oil went from $25 to $152 per barrel.
So, what’s next?
With an election that’s less than four weeks away, The New York Times is right to be worried as the Federal Emergency Management Agency’s clown-show marches on and the Iran drums beat war.
Of course, given the Biden-Harris administration are the ones who gutted FEMA to pay for illegals and set the Middle East on fire by emboldening Hamas and funding Iran, that would be some well-deserved karma.
Peter St. Onge is a visiting fellow at The Heritage Foundation.
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