Gasoline prices could soar as high as $7 a gallon this summer thanks to supply threats stemming from Middle East unrest as well as OPEC policy, says real estate mogul Donald Trump.
Iran has already cut off supply to France and to the U.K. to protest sanctions from the west, who accuse Tehran of developing a nuclear weapons program.
U.S. military officials have said they feel they can ration with Iran, although fears are growing that Israel may consider a unilateral strike on Iran anyway, which is sending crude oil skyrocketing.
Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal
Watch the Aftershock Survival Summit Now, See the Evidence.
Higher oil prices lead to high gasoline prices, which have prompted some U.S. refineries to close up shop when people buy less fuel, which further exacerbates supply issues.
The result: pain at the pump — prices are soaring and well earlier than they should be.
Prices commonly peak in spring and summer due to seasonal factors like the price of refinery feedstocks and the arrival of the U.S. summer driving season.
"We are going to have a crisis, a crisis on energy like you've never seen before, and if you see gasoline is going to be at $4 and it already is at $4 — the highest it's ever been in history at this time of the year," Trump tells CNBC.
"Oil continues to go up, gasoline is going to be at $5 or $6 or maybe $7 a gallon in the summer when they really have the demand. And it's going to really be destructive to this country."
Don't blame speculators on rising prices either. OPEC countries are ensuring prices stay high by regulating output, Trump said.
"OPEC is the one that's setting the prices and OPEC is laughing at us like nobody's ever laughed before," Trump says, adding swings in energy prices threaten the U.S. more than big banks, which continue to receive blame from politicians, regulators and the Occupy Wall Street movement for the economy's woes.
"Energy as you know is a tremendous factor and when we had our last — call it a mini depression, that's really what it was — you know, everybody was blaming the banks and the bankers. And certainly the banks had something to do with it, but I always felt that energy had more to do with it than the banks," Trump says.
"I consider oil to be the blood of the nation and the blood of the world. And that blood was so high, and I really believed that had more to do with our depression/major recession, whatever you want to call it, than interest rates or banks or problems or mortgages or home loans or anything."
Gasoline prices are currently averaging $3.53 a gallon, and some experts see that figure hitting a record $4.25 a gallon by April, well before the peak season.
"You're going to see a lot more 'staycations' this year," says Michael Lynch, president of Strategic Energy & Economic Research, according to the Associated Press.
"When the price gets anywhere near $4, you really see people react."
Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal
Watch the Aftershock Survival Summit Now, See the Evidence.
© 2023 Newsmax Finance. All rights reserved.