LARRY KUDLOW: Trump’s secret oil hoarding could delay Fed interest rates
FOX Business host Larry Kudlow discusses Trump’s handling of the Iran war and analyzes economic performance on ‘Kudlow.’
So look, Project Freedom to reopen the Strait of Hormuz has been working in secret all this past month. According to President Trump’s disclosure today, our military has secretly assisted more than 200 commercial vessels with more than 100 million barrels of oil through the Strait.
This is done through communication and communication to move the ships freely and safely, not to escort them. Here’s the president earlier today spilling the beans: “You know what I can say now. Something you didn’t do. You know, we were taking out millions of barrels of oil. Nobody knows. You know who knows about it? Iran. Until now.” He added that “we took out 22 ships in one night without lights, because they don’t have radar, because we blew up their debris. We took them out. That’s why oil is $85 a barrel.”
No lights, no transponder, no Iranian radar. You are right. Now, these numbers are very good. And 100 million barrels of oil have arrived in the Strait in various places around the world, let’s think in the last month or 30 days. That is an increase in oil supply of 3 million barrels per day.
Israeli special ops veteran Aaron Cohen and The Heritage Foundation’s Victoria Coates discuss how to keep oil prices afloat amid a conflict with Iran on ‘Kudlow.’
And to put that in context, global supply and demand combine at about 100 million barrels per day. So taking 3 million by secretly opening Hormuz, adding about 3 percent to the world’s oil supply, is a big deal. And that certainly helped stop oil from reaching $150 a barrel or $200 a barrel. For more context, America produces 13.6 million barrels per day.
In fact, West Texas WTI reached $113. today it is $90. That’s a drop of about 20 percent. Gasoline went up by $4.56 back in May. Today it’s $4.15 according to AAA national statistics. So that’s about a 10 percent drop. Almost half of the states today have $3 gas. I know that creates anxiety, and everyone wants at least the bottom dollar. However, it still seems like a small price to pay to free the Middle East and the rest of the world from the grip of radical Islam in Iran. And certainly Mr. Trump is right. This war will end soon and the prices of oil and gasoline will drop dramatically.
Which leads me to my last point on today’s CPI which is up 4.2 percent on the top list year over year. However, only 2.9 percent are without food and energy. Of course, most of this jump in prices is from the 104 percent increase in the energy year in the last three months. And to skip the fuel by 250 percent. Commodity prices, by the way, at least excluding food and energy are basically flat. So much for the threat of inflation.
Sen. John Kennedy, R-La., says the biggest concern of most Americans is the rising cost of living, not foreign policy or cultural debates, to ‘Kudlow.’
However, let’s not forget that the economy is booming. Manufacturing, capital goods, factories, construction, profit, production, and stocks (even current sales). Low taxes, a light touch of regulation, drill, baby, drill, and the AI boom is growing the American economy by about 4 percent with low unemployment. Supply side change.
And hopefully at next week’s Fed meeting, Chairman Kevin Warsh will tell the world that growth doesn’t cause inflation, and it doesn’t cause short-term deflation. The new chairman will hopefully bring new models, and a new atmosphere a week from today.
