President Donald Trump has once again taken to Twitter to slam OPEC for driving up oil prices. The group is a useful scapegoat on which to pin the blame for rising gasoline prices at home, but getting it to pump more crude won’t bring them down for long. The way to really lower prices is for him to change his policy on Iran.
Unfortunately, that’s not likely to happen, so oil prices could well keep rising. Oil prices have climbed by more than 50 percent in a year, and very nearly touched $80 a barrel last week as traders anticipated that the world’s margin of spare production capacity available to offset supply disruptions is set to seriously shrink.
They know something that the president either can’t or won’t understand: When sanctions on Iran come into force in November, producers don’t have the scope to make up for its lost output. If Trump succeeds in halting all of Iran’s oil exports, they will have to replace 2.7 million barrels a day of Iranian supply. That’s a big hole to fill.