On Thursday, responding to a question about whether the U.S. would back Israel if it targets Iranian oil facilities, the president responded, “we’re discussing that,” but added, “there’s nothing going to happen today.” In the hours after the remarks, West Texas Intermediate, the U.S. oil benchmark, spiked 5.5 percent.
Biden was less ambiguous in discouraging an attack on Iranian oil at a White House briefing Friday, saying, “The Israelis have not concluded what they’re going to do in terms of a strike. That’s under discussion. If I were in their shoes I’d be thinking about other alternatives than striking oil fields.”
The Israeli bombardment of Gaza in response to the Oct. 7 attacks has had muted impacts on the oil market in the last year, especially compared to Russia’s 2022 invasion of Ukraine, which sent gas prices to all-time highs.
But Biden’s remarks come as the conflict in the region has escalated dramatically in recent months, including an Israeli incursion into Lebanon that killed Hezbollah leader Hassan Nasrallah and a retaliatory strike by Iran this week.
If further Israeli actions do impact Iran’s oil production, their effects could be felt in the global oil market — and Americans’ wallets.
Iran produces about 4 million barrels of oil daily, making it the No. 7 producer of any nation worldwide. While the U.S. does not rely on imports from the nation, oil’s status as a global commodity means a shock to Iranian supply would still likely affect American consumers, said Andy Lipow, president of consulting firm Lipow Oil Associates, LLC.
“The United States is connected to the global oil market, [and] if that market lost supplies of Iranian oil it affects the consumer because worldwide prices rise and the U.S. has become a major supplier to the world,” he said.
