softwaredoug
4 hours ago
It seems one way Iran fights the US asymmetrically is by harming the Federal financial picture with endlessly higher rates + borrowing costs. If this keeps happening month-after-month, year-after-year, we're really going to feel the squeeze.
Treasury has already tried to reassure markets and failed
Add to this other trade war nonsense...
alangibson
3 hours ago
Iran said publicly that driving up costs in the USA to effect the coming elections is their strategy.
dietr1ch
2 hours ago
and I'm not sure how much they need to do to drive up costs. During Covid the economy has started showing signs that the incentives are wrong and Trump 2 showed you can just buy government favours and tilt the field to your advantage.
bluGill
3 hours ago
Even if they don't say that, it is the obvious thing to do. Elections are coming up in a few months. Already because of midterm elections the democrats were expected to gain seats (this is something you could predict the day after the 2024 elections before Trump took office again). The democrats are not so stupid as to not yell about gasoline prices in their advertisements - this is a big deal to a lot of people. Iran has a lot of power to affect gas prices (something they have long known) and so their best chance to harm Trump is to ensure the democrats win as many seats as possible.
The real question is what happens after the elections. There is a lot happening in Iran and nobody can figure out which factions really are gaining power (we know who is the public voice of power, but not if they have real power)
iso1631
4 hours ago
This would not be happening if the USA had not launched an attack on Iran
This was the desired effect though, as higher oil prices means more profit for US based oil producers. I'm sure that will trickle down any time now.
disgruntledphd2
4 hours ago
> This was the desired effect though
Honestly, I think you're giving far too much credit to the current US government.
avidruntime
18 minutes ago
Personally I think the hanlon's razor approach is an intellectually lazy thought terminating cliche that provides cover to people/groups who do act with malice.
A US administration sympathetic to Russia stands to benefit from higher oil prices.
gizajob
4 hours ago
It’s a simple calculation though and not talked about enough. USA went to war in Iraq 25 years ago thanks to the oilmen in charge at that time. For all the political bluster about Iran and gas prices, $100 oil makes them hugely more profit than $60 oil. Of course producers and shareholders of American oil companies want that extra free money. They’re not pumping oil out of the ground and keeping it at a low price just to be benevolent to the American consumer.
nradov
3 hours ago
It's more complex than that. US crude oil extraction companies don't want prices to climb too high as longer term that destroys demand and encourages customers to find alternatives. Something in the $75–80/bbl range for WTI crude is probably optimal to maximize long-term industry profits.
iso1631
2 hours ago
They can afford to let domestic prices increase more due to the political allies they have. When burning oil is subsidised by wind farms are banned that's a win-win for the oil companies.
toomuchtodo
4 hours ago
I think that is a contributor, but the root cause of the Iran war was Netanyahu goading a simple person into it. The US military and intelligence community knew the risk of this, told everyone not to do it, and they did it anyway.
(if one is some combination of unsophisticated, irrational, and vain, and in a position of power, they will eventually be exploited by someone more rational and sophisticated, imho)
gizajob
3 hours ago
That’s correct but it’s multimodal. It might not have been the reason for getting involved in the first place but it does now seem like a reason for something happening every time the oil price starts to drop again.
toomuchtodo
3 hours ago
Strongly agree, there's alway nuance and complexity.
wombat-man
3 hours ago
I don't even really understand Israel's game plan here. Iran took a lot of damage but now they control the strait, they have a lot of leverage. Hard to know how it's going to shake out, but how is Israel better off now?
bluGill
3 hours ago
Israel didn't really change their position much. Iran was already funding all their enemies.
I suspect (know way to know) Isreal would have been better off attacking Iran alone - they could have sent a message "back off - we can do more harm to you than you can do to us", but sending that message is hard. They tried to send a clearer bigger message, but the problem is the message getting through ended up being "this is the worst that you will do to us and we can endure". The reality is Iran knows the US and Israel won't invade, and so long as that option is off the table Iran can do anything it wants knowing things won't get worse.
Compare to how Bush handled Iraq - months of convincing the world to help him invade (not always successfully, but enough that many people were sending troops). If conditions were sent such that troops really were on the table I would expect Iran to back down (I give it about 60% odds, which means 40% an invasion happens!). Israel would have won in that case, but it wasn't handled like that (there are reasonable odds that the US would refuse the propaganda to invade if that was tried though which means Israel would be back to the previous status quo...).
You probably have to read that last paragraph a dozen times to understand it. I'm not the best writer and it is a complex subject.
mikeyouse
3 hours ago
They’ve massively expanded into Lebanon and Gaza, settlements are continuing to grow at an alarming pace, the Saudis have little choice but to get massively more involved in fighting Iran and their proxies, A less feckless US campaign could have eliminated or greatly weakened Iran’s nuclear program, Bibi’s mostly consolidated all power in Israel… it hasn’t worked out that poorly for Israel.
toomuchtodo
3 hours ago
This was Israel’s last chance to strike on Iran using the US as the munition, because the next Congress and President wouldn’t and Netanyahu (76 years old as of this comment, close to end of male life expectancy) will only live or be in power for so long.
Very similar to Putin (73 years old, as of this comment) making his move against Ukraine when he did. Light cone of potential outcomes and path dependency.
“Old men pulling triggers out of ideology before they’re too weak to.” I argue that, in many ways, extended life expectancy has been a curse in this context. It has allowed unscrupulous people positions of power where great harm is incurred with limited repercussions (if any!), positions of power they would not be in if they had aged out sooner. You can only wait to vote them out, or wait for them to die if you cannot vote them out. Very unfortunate.
iso1631
2 hours ago
They don't care about long term effects because they don't need to suffer them.
toomuchtodo
2 hours ago
Correct. "Show me the incentive and I'll show you the outcome." -- Charlie Munger
Can systems be changed to expose these folks to the appropriate incentives that will improve outcomes? ¯\_(ツ)_/¯
fpoling
4 hours ago
Refineries in US are making even bigger profits. They even skip on maintenance running at 95% capacity non-stop.
bluGill
3 hours ago
For now. They are well aware of the long picture. They know how long they can risk doing without maintenance, and will do it eventually. They are also well aware that EVs are coming and high fuel prices hurt them long term because people will switch and not come back.
Someone else suggested they see $85/bbl as the ideal price. I don't know if that is true, but it seems reasonable.
fpoling
2 hours ago
EV is committing irrespectively of what refineries are doing at this point. The latest Chinese models with a reasonable range are cheaper to manufacture than ICE cars. So I can see why refineries want to get as much money as possible now before the massive switch to EV.
bluGill
2 hours ago
No Chinese EVs in the US (yet)...
This is a really complex optimization problem, but slowing EV adoption, which low gas prices help, is likely the better course for a few more years. Eventually just gouge the petrol users left is the most profit, but I don't think that has been reached yet.
softwaredoug
3 hours ago
Yes its a rule in hell situation. Some folks are getting a larger share of a shrinking pie.
I am unsure its by design or just idiocy. (Probably a mix of both).
gruez
4 hours ago
>This was the desired effect though, as higher oil prices means more profit for US based oil producers. I'm sure that will trickle down any time now.
That's giving the Trump administration too much credit. Before the war there were pieces about how oil companies were doing worse under Trump than under Biden[1]. Of course, you could argue that the Iran war is Trump finally responding to oil companies, but given that it only started more than a year after he took power, it really makes you wonder whether Trump is bumbling along, or playing some 5d chess with the global oil market. On the flip side there's plenty of evidence that he doesn't want high oil prices, for instance lifting sanctions on Iranian and Russian oil.
[1] https://www.economist.com/business/2025/02/06/donald-trump-l...
voakbasda
3 hours ago
I don’t know why anyone gives Trump credit for things like this. He (like all elected officials for the past few decades) is a figurehead and has been manipulated by careerists at every step, who themselves are beholden to the lobbyists that grease the wheels of government.
tencentshill
2 hours ago
It's not that complicated with him. He literally gets on the phone with CEOs and takes orders directly. But that only sticks until another competing interest talks to him.
iso1631
an hour ago
You reach him by running appropiate messages on fox news
Like any senile octogenarian you want to do something, brainwash them to do your bidding and make it think it's their own choice
gizajob
4 hours ago
It’s more like 2D chess, so within DJT’s comprehension.
nisegami
3 hours ago
Non-US based producers too, I can already see the difference in my country's economic position.