The Iran war’s economic effects could pull oil, diesel, Treasury yields, and election politics out of their separate crisis lanes and into one grim American adventure.
I’ve been watching a developing situation in America that reminds me of a classic Calvin and Hobbes comic strip installment where Calvin plays a game and weaves together the story of a passenger jet’s engine randomly exploding at 35,000 feet in the air and a 50-car freight train loaded with 500,000 tons of metal jumping the tracks and both are barreling toward a crack in the earth where an earthquake is forming, while a farmer lights a match in a house that has a gas leak and sits on the fault line.
The only difference is that Hobbes can ask Calvin to plan another game. And he did.
But real life won’t be as simple.
As America’s Iran war mission creeps toward keeping a major world oil artery open, I’ve been watching the ten-year Treasury yield inch toward five percent — a level that becomes the bewitching zone for the economy since financial markets will freak out at that point and the price of everything can quickly go much higher.
These events place even more pressure on President Donald Trump to save the midterm elections for his political party. An unpopular war, jittery bond market, and an expensive economy in need of a fix should have his administration worried.
That leaves him with a few ugly options — and only the first one isn’t immediately dangerous:
- Declare “mission accomplished” and leave the Persian Gulf immediately
- Open up the Strait of Hormuz with more force — and likely take on more American casualties
- Do a straight-up banana republic and lock down voter participation to ensure his party’s victory in November — despite what the war’s doing for his reputation among Americans
The first option likely won’t happen — which makes the oil situation more serious than ever.
Remember when Trump acknowledged a brewing oil shortage and the Strategic Petroleum Reserves were weeks from running on vapors?
The public watches gasoline prices because that’s the number glowing on every gas station sign.
But the American war machine watches diesel.
And so do trucks, farms, mines, ports, rail yards, construction crews, backup generators, and the supply chain that gets food and medicine into cities.
If oil gets tight, Team Trump will think less about whether or not Americans can drive to Red Lobster and focus more on what fuel will be around to keep the war, freight, and critical infrastructure moving.
An exploding plane, derailing train, earthquake, gas leak, and a match.
Fuel may be entering the zone where the US can’t fix the problem with speeches, media theatrics, market announcements, reserves, or investor confidence-building alone.
Plus, America is financing a widening war with higher borrowing costs in recent memory while navigating an authoritarian-style political crisis — all potentially over the next 90 days.
And the really scary part?
It’s not that all of these things are happening.
It’s that Washington may be treating them like separate problems …
song currently stuck in my head: “never lost (luedji luna remix)” – kokoroko
Image note: cinematic AI-generated illustration created for mentalunrest. The graphic concept is loosely inspired by Bill Watterson’s Calvin and Hobbes comic strip about a plane, train, fault line, gas leak, and a match converging at the same time.
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