International Oil Prices Threaten $100 Mark... Growing Burden on Trump Ahead of Midterm Elections

Amid renewed escalation in tensions between the United States and Iran, international crude oil prices have again surged to nearly $100 per barrel. Some analysts are now predicting that prices could soar as high as $120 per barrel if supply disruptions worsen. As a result, the already record-high U.S. fuel prices are expected to rise even further, intensifying the political burden for U.S. President Donald Trump ahead of the midterm elections.

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On September 7 (local time), November Brent crude on the London ICE Futures Exchange closed at $97.31 per barrel, up 1.1% from the previous session. During trading hours, the price reached $98.06 per barrel, marking the highest level since July 24.

Oil prices jumped after it was reported that Iran had recently launched missile attacks against two U.S. Navy vessels and, in retaliation, the United States struck three Iranian oil tankers. Adding to concerns, news surfaced that Saudi Aramco's Jizan oil facility had also come under attack. As a result, fears over supply disruptions in the Middle East have intensified even further.

There are also projections that international oil prices could reach as high as $120 per barrel. Goldman Sachs forecasted that, should attacks on vessels in the Middle East become more widespread, international oil could soar to $120 per barrel. Jeff Currie, Co-Head of Global Commodities Research at Goldman Sachs, told Bloomberg TV, “The recent events over the past few days suggest that we must pay very close attention to the risk of shipping disruptions escalating and worsening.”

However, there is also a possibility that concerns over supply disruptions may ease, as Iran and Oman announced that negotiations to designate temporary safe shipping routes in the Strait of Hormuz have reached their final stage. Esmaeil Baghaei, spokesperson for Iran's Ministry of Foreign Affairs, said that the two countries plan to register their memorandum with the International Maritime Organization (IMO), which oversees global shipping under the United Nations, and that “the negotiations have made very good progress.”

The surge in global oil prices is likely to further increase the burden on President Trump and the Republican Party as the U.S. enters the upcoming midterm elections in November. On this Labor Day, the national average price for regular gasoline in the United States reached $4.15 per gallon, setting an all-time record for the holiday. This represents an increase of roughly 30% compared to $3.20 per gallon during the same period last year. The Financial Times (FT) interviewed residents of New Jersey’s 7th Congressional District—a key battleground in the election—about how changing oil prices are affecting public sentiment. Even though this is a relatively affluent area with a median household income of $133,000 per year, residents are still unable to avoid the strain of high fuel costs.

President Trump’s approval rating continues to decline. According to the FT, a recent nationwide online poll conducted jointly with polling firm Focaldata found that Trump’s job approval rating among U.S. voters stood at 33% in August, down 3 percentage points from the previous month. This is the lowest level since the FT began tracking this survey in May. Around two-thirds of respondents said the economy is headed in the wrong direction. In addition, 57% of respondents said their personal economic situation has worsened since Trump took office, up 4 percentage points from 53% last month. The survey was conducted online among 1,914 registered voters across the United States from August 28 to September 1, with a margin of error of ±2.6 percentage points.

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