Well, it did not take long, did it? The price of retail gasoline and diesel at the pumps over the course of the weekend saw successive increases in a cynical grasp at opportunity. It is price gouging at its ugliest, because the fuels that are ready to be pumped into the tanks of ordinary folk would have exited a refinery quite some time ago, depending on where one lives. Retailers are preparing customers for a price shock was an opinion on social media; how very altruistic of them. Nonetheless, and despite our unapologetic swipe at injustice, this is the hope of the Iranian regime. Not only can the usurious West be relied upon to not let a quick buck pass it by, but the hype whipped around shortages of all fuels will eventually have some legitimacy depending on how long the Israel/US campaign continues and or the closure of Strait of Hormuz remains. 

By the look of it, Iran is digging in for a long and drawn-out war. The naming of executed Ayatollah Ali Khamenei’s son, Mojtaba, by the top clerics of Iran to be the new Supreme Leader is a vote for continuity in the hardline theocrats and thumbs a nose at the US desire for regime change. Khamenei the younger is a close consort of the IRGC, and despite his now having something of target on his back, the title of commander-in-chief of the Iranian armed forces and now being the highest and political and religious authority, outlines the fervour in which the Islamic Republic will defend the status quo. It also shows the limit in effectiveness of air warfare, because after the initial shock and awe, sadly, everything falling from the skies becomes everyday and the surprise is lost. This is why the US President has mentioned ‘boots on the ground’, a frightening, but probably hollow proposition and one that will be utterly decried in every state of the American union. Trump’s promise of a quick and limited war and decisive victory is long disappearing in the rear-view mirror. It smacks of WWI British soldiers wandering off to Flanders and the Somme with the words ‘back in time for Christmas’ on their lips. 

Without dealing a fatal blow to Iran’s ruling class, other things will be found to blow up, which can only be infrastructure with the most telling being those of oil. There is no complacency in oil prices anymore, the prospect of conflict protraction and further outages of oil supply are taken up as a cause rather than dismissed as transitory. Iraq is running out of storage, Kuwait has none and has declared force majeure on deliveries to Asian buyers, the repercussions of Hormuz being plugged roll on and become more acute every day. Which takes us back to the prices for everyday forecourt buyers. According to GasBuddy, the US retail fuel tracking company, the current average price across the United States for regular Gasoline is $3.458/gallon. This is up 51.7c from last week’s average, 61.1c up from last month’s average and 38.7c up from last year, yet this is an average across the USA, in some areas such as California drivers are having to up to $5/gallon. The extra pinch from the culling of motor fuel supplies from China has yet to be truly factored in. 

Again, Iran has no other option than to dig trenches and await the howls from the many millions of Americans who suffer under the ‘cost of living’ crisis that contradictorily besets any idea of a nation plurally benefiting from the wealth creation seen in its stock markets. Whatever benefits the US President envisages for America in this illegal war will be lost on the altar of the mid-term elections and likely the next general election for the Republican party. The annual policy retreat of House Republicans in Florida hoped to hear of a clear path in terms of goals, policy and most importantly when the world could expect an end to the war on Iran. What they, and we received, was another incoherent ramble which murdered the English language in double-talk and confusion. Earlier he had posed remarks that the war was “very complete, pretty much” to a CBS News reporter in a phone call. But when quizzed later of the statement, and whether the war could be wrapped up soon, he replied, “no but soon, I think soon, very soon.” He was also confronted with a reminder on Defence Secretary Pete Hesgeth’s peacocking on CBS’s Sunday evening ’60 minutes’ that the US strikes were “only just the beginning”, to which Donald Trump said the outcome “could be both.” And to complete the cringe-worthy slaughter of the language of Shakespeare, "we've already won in many ways, but we haven't won enough."

The market started espying the so-called ‘off ramp’ on their GPS systems earlier when the IEA said along with the G7 it was considering a strategic petroleum reserve release. According to Reuters, Fatih Birol, the IEA head, told G7 finance ministers on Monday that his ⁠group's members hold more than 1.2 billion barrels of public emergency oil stocks which aligned with an earlier statement from US Energy Secretary Chris Wright that it was considering releasing US SPR along with waiving sanctions on Russian crude bound for India for thirty days. Brent was barrelling toward $120 and registering record numbers on time spreads as yet another twist turned sentiment turtle. In calm times, the SPR release would and should be taken seriously, but the US is in the process of refilling its reserve which was drained by some 250mb under Joe Biden. Being at 415mb, a third of the G7’s total and at an historical low ebb, how can Uncle Sam afford to appease the oil price when it is engaged in war? The SPR of China dwarfs the G7s and to denude the groups storage is strategic suicide. It is not realistic and is mealy mouth pandering to high oil prices and falling stock markets, the only thing that ever changes Donald Trump’s mind.

None of us know the end game, it would appear as fluid as the daily drivers delivered by the next bout of aerial exchange. Which is Iran’s point. It has said it will not stop its threat to shipping until the Israel/US air campaign halts. It has also said it will determine the end of the war. The admission, no matter how ineloquently and surreptitiously delivered, that ballooning oil prices might be the moment of ‘off ramp’ for Donald Trump is music to mullahs of Tehran. But until the way forward in strategy is revealed and the cork in the Hormuz bottle popped, anxiety will keep oil prices aggravated, whatever talk there might be on SPR releases.

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