Gas around here was already down about 40 cents from its peak; my wife said she saw it for $3.54, which I found remarkably low considering it had reached $4.20. With this weekend’s announcement by Trump, the Pakistanis, and, apparently, the Iranians that a peace deal had been reached, it should drop more.
When it does, fill up your gas tank. If you heat with propane, consider filling your home heating tanks when propane or fuel oil settle at a new, lower price. Not only because of the drop in fuel prices but because propane and home heating oil for household delivery is usually cheaper in the summer than it is during the winter when everyone is heating their homes with it. Buy it in the summer and you should save a bit. If you have 500 or 1,000-gallon tank, “a bit” per gallon adds up.
Whether or not you believe Trump uses news about the war to manipulate markets, this joint announcement will have an impact. It will be interesting to see what the financial and metals markets do. As I write this at midnight on Sunday, gold and silver futures are both up, while oil is down.
Is it a Pause, or the End?
So take a deep breath, enjoy the lower gas prices and the idea that Iran won’t have a nuclear bomb, but don’t let it sway you too far. This is one stop on a long road to a lasting peace, and there may be setbacks or it may collapse before the 60-day deadline expires. Not because of Trump, but because this is Iran we are talking about, a nation that has lied and cheated and will continue to do so because their holy book tells them it is okay to lie to infidels and kill them.
This is also an opportunity to learn from what happened over the past three-and-a-half months. If you didn’t know what to expect when the Strait of Hormuz closes, you do now. Now you can ask yourself if there is anything you can or should do to prepare for it closing again. You can also extrapolate from there and think about what you should do if someone starts blowing up refineries in the U.S., as the Ukrainians are doing to Russia. Because I doubt there is much anti-drone technology deployed around our tank farms and refineries. Blowing up a liquefied natural gas terminal would not only hurt the U.S., but all those European and Asian countries that depend on our natural gas exports.
Despite the warning about Walmart running out of motor oil, I didn’t see that happen around here. No one I know complained that the cost of an oil change shot up. I didn’t hear of anyone who couldn’t get their oil changed because their local shop was sold out. I just bought a gallon of hydraulic fluid for the wood splitter, and there was plenty on the shelf, including five-gallon buckets for heavy machinery.
Watch Inflation
Some threats about the outcome of shutting down the Strait were exaggerated, at least for those of us in the U.S. Our mineral wealth, oil wealth, and the dollar itself protected us from the worst side effects. Places like Australia and India, which have little indigenous oil production, suffered more.
It will be interesting to see if inflation drops along with the price of oil. Will your power bill increase only 4 percent instead of 14? Will fast food prices stabilize or drop? How soon will shipping surcharges drop? Will food prices retreat as the cost of diesel falls? Even before this agreement, fertilizer prices had already recovered to pre-war prices, so those fears were overblown.
If Washington is smart, it will use the expected flow of oil from the Middle East to refill the strategic petroleum reserve. Because we might need that oil one day in the not-too-distant future. Maybe it will also rebuild its munitions stockpile and replenish the supply of missiles and rockets, from the Patriot to the Tomahawk and many drones. Better yet, use this as an opportunity to build stocks of new, more advanced missiles, rockets, and drones.
If you and I are smart, we will take advantage of low prices to refill our gas cans and pantries, to buy goods on sale, and to build our stockpiles. And like the U.S. military replenishing its munitions, it is never wrong to buy a few extra boxes of ammunition. It doesn’t go bad.
If we are back at war with Iran on sixty days or six months, then you can shrug while others wail and gnash their teeth, knowing your gas cans are full, your home heating oil and propane tanks are topped off, and you’ve added a few weeks of food to your prepper pantry.
The Next Threat
While this war may be over (and note I said “may,” implying that it may not be) we can turn our sights back to Russia and Ukraine, as well as the threat that China poses.
Russia seems to be losing, which is welcome but also dangerous. Some feel they may lash out at NATO, but I find that hard to believe. If you can’t beat Ukraine, how can you expect to beat all of NATO, which still includes a sizable piece of the United States’ military? You think the refineries and oil storage tank farms are taking a beating from Ukraine drones, wait until U.S. missiles target Russian infrastructure. And if Russia can’t establish air superiority over Ukraine, how will they ever do so against the U.S.? Russia cannot win alone.
No doubt China learned some things from the war. That can work in our favor or against us, depending on if what lessons they took from it. Did the war in Iran push China’s invasion of Taiwan a few years further down the calendar, or did it bring it closer? Does our new influence over the global oil market serve as a warning to China, or push them to move faster? Will our advances in AI outweigh their advances in robotics?
My guess—and in my book a guess is not even as firm as a prediction—is that China will not move on Taiwan while Trump is in office. They will bide their time until someone else like Biden is in office and strike then. That gives us—as individual preppers and as a country—more time to prepare.
Reading the Tea Leaves
Keep in mind that the years leading up to World War II were filled with smaller wars, from the Spanish Civil War (1936 to 1939) to Japan’s invasion of mainland China in the 1930s. Germany also made moves that predicted its future behavior, from withdrawing from the League of Nations and the Geneva Disarmament Conference in 1933 to its remilitarization of the buffer zone bordering France in 1936. Germany also annexed Austria, claiming it was reunifying the German-speaking people, much like Putin claimed his invasion of Ukraine was to reunify Russian-speaking people who “wanted” to be Russian instead of Ukrainian.
The current state of war may not be an exact repeat of what happened 90 years ago, but there’s a reason they say history doesn’t repeat, but it rhymes. Someone with a sharp ear should hear the rhymes and notice that a new Axis of Evil is being formed. If Reagan were president, he would not hesitate to call it out: Russia, China, North Korea, and Iran. They have used the recent wars to strengthen their alliances, and all have an enemy in the U.S. and NATO. Whether they feel strong enough to strike out in a unified fashion remains to be seen. That is the long-term threat for which we must all prepare.
