With the high cost of gasoline becoming a major election issue, President Obama seems to have found a ready-made scapegoat today, insisting that Iran is actually to blame for the price at the pump. “Right now the key thing that is driving higher gas prices is actually the world’s oil markets and uncertainty about what’s going on in Iran,” Obama insisted. “[T]hat’s adding a $20 or $30 premium to oil prices, and that affects obviously gas prices.”
Obama made similar comments at multiple campaign spots, insisting that domestic oil production has nothing to do with the high cost of fuel. The size of the “war premium” on a barrel of oil, and indeed whether such premiums exist at all, have been a topic of regular debate among economists.
But blaming Iran as such for the premium is entirely misleading, since it is not Iran, but rather US and Israeli threats to attack Iran, that have created that uncertainty. While the threats are nothing new, there seems to be a consensus that they are getting more “serious” and that Israel in particular could decide to start a major war in a matter of months.