Trump is commandeering the Strait of Hormuz to rig the pump prices we pay.
I filled the Silverado at the co-op in Friendship yesterday afternoon. Regular $3.49, diesel $3.89. Down a dime from last week, but I’ve learned not to trust a dime. When a president wakes up threatening to seize Iran’s main oil terminal and goes to bed saying a peace deal might be days away, the pump price in Adams County is a seismograph, not a price tag.
The Wall Street Journal reported Friday that Brent crude fell to $88.39 a barrel after Trump called off planned strikes on Kharg Island, the hub that handles the bulk of Iran’s crude exports. West Texas Intermediate dropped to $85.91. Both benchmarks lost roughly 7 percent on the week. Deutsche Bank called the reaction swift, and the entire futures curve moved lower. But the same markets were climbing just days ago when a fragile ceasefire nearly came apart after Iranian missiles, and they dropped on optimism the week before that. The futures tickers in Chicago don’t care; the tank on my pickup just pays them.
The Strait of Hormuz is a chokepoint a few miles wide through which roughly a fifth of the world’s oil passes. Park a carrier group there and threaten to seize the terminals, and the market prices in the risk. Call it off for a peace deal, and the risk evaporates. The oil itself hasn’t changed. The premium for moving it has. That premium is a tax on uncertainty, and it lands on every farmer, every logger, every snowmobile tour operator whose entire winter margin lives in a three-cent spread.
Anyone who’s read Yergin’s The Prize knows the 1973 embargo stamped energy security into our political vocabulary and birthed the Carter Doctrine—the idea that defense of the Persian Gulf is a vital national interest. That framework was built to protect supply, but today it looks less like a shield for our interests and more like a lever. The administration threatens to take over another country’s energy grid, and the futures market doesn’t just see a risk of war. It sees a restructuring of who controls the commodity. The men writing the contracts do not live in Friendship. They do not feel the first bite of a price jump in the tank of a Chevy Silverado when they threaten a strike, and they do not feel the relief when they call it off. They just trade the difference.
Wendell Berry, in The Unsettling of America, calls it the extractive mind—the willingness to treat the world as a warehouse of things to be taken and moved without regard for the cost to the communities that sit on top of them. The extractive mind isn’t just a strip mine in West Virginia or a dairy operation whose lagoon spills into the aquifer in Kewaunee County. It is the geopolitical assumption that the energy resources of another hemisphere can be seized by force to flatten a curve on a Chicago exchange. And when the president wields that assumption as a price-discovery mechanism, the entire diesel-dependent heart of the country becomes a weight on the end of his lever.
We up here have been watching this yo-yo all month. Last week, before the ceasefire wobble, diesel was $3.99. The week before that, when things were calmer, it was $3.79. The difference between a presidential threat and a presidential pullback is a dime or two a gallon—doesn’t sound like much until you’re a dairy farmer running a skid steer six hours a day, or a logger filling a forwarder, or a small-engine mechanic with a shop full of equipment that needs fuel to run. You can’t defer hay baling because diesel spiked ten cents on Tuesday, but margins are too thin to pre-buy.
The rhetoric is nationalist—the promise that by taking control of the Strait, we secure our dominance. The reality is that the U.S. has been a net exporter for years, and domestic production hit a record 13.6 million barrels a day last year. The price of a barrel in Adams County is not set in Washington. It is set in Rotterdam, in Singapore, and in the pits where a threat of invasion is priced into a contract my parts supplier uses to ship a pallet of carburetors from a warehouse in Illinois. The nationalist shell game works by convincing the man paying the pump price that he is also the beneficiary of the empire. He isn’t. He is the collateral.
A deal gets signed, or it stays dead. The Strait will stay open, or it will close. But the diesel in my shop’s day tank will cost what the global market says it costs, and the market will react to every threat and every reprieve with the same mathematical indifference. When the president uses the military to rig the energy markets, he is not defending rural America. He is betting on its fuel costs. And in that bet, the house always wins—but the receipt from the fuel supplier still lands on my desk. That’s not a policy. That’s a roulette wheel. And the wheel is spinning over a county that already can’t afford another bad year.