Why are we paying more for gas right now?

Four years ago we made an episode about how the president has very limited powers when it comes to lowering the price of gas. Turns out, we hadn't considered every possibility. Today, we talk about how a president can make gasoline more expensive, by waging conflict in the middle east. Our guest is Robert Rapier, chemical engineer, investment writer, and energy sector expert. He came back on the show to tell us about the logistics of Iran closing the Strait of Hormuz, and whether there are any ways out of this. Click here for our other episode on the price of gas, and read Robert's article here. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  We're down lower than we've been in seven years. Gasoline prices and oil prices, not just the three states that I talk about with $1.99 a gallon. How would you like to have $1.99?

• 0:13Speaker 01

  The US and Israel have launched strikes and a major military operation targeting Iran.

• 0:18Speaker 02

  And good evening. We begin tonight with the escalating battle over one of the world's most vital shipping channels.

• 0:24Speaker 03

  Here, not everybody's planning to vote for Republicans in the midterms who supported Trump. Let's take a listen to one more woman who we spoke with. And you voted for him how many times?

• 0:33Speaker 04

  Three times. That was my bad. Apparently, I'm an idiot.

• 0:41Nick Capodice?

  You're listening to Civics 101. I'm Nick Capodice.

• 0:43Hannah McCarthy?

  I'm Hannah McCarthy.

• 0:44Nick Capodice?

  And today, we have a correction. Maybe more like an update. Four years ago, I made an episode where I implied that the president has little to no effect on the price of gas. Turns out, I was wrong. Stick around.

• 1:04Hannah McCarthy?

  All right, Nick. Tell me how you were wrong about the president and gas prices.

• 1:09Nick Capodice?

  Well, it's less of a wrong, more of a yes and, Hannah. There is, by the way, a link to our episode, "The President and the Price of Gasoline", down there in the show notes. But it's not inaccurate. That episode's good. It stands. It's legit. I just didn't consider every possibility. One possibility in particular. But to start, I want to just quickly remind everyone what a president can do to affect the price we pay at the pump.

• 1:37Speaker 02

  So, a president has relatively few handles in the short term to deal with gasoline prices.

• 1:43Hannah McCarthy?

  Wait, is that the same guy you had on in the episode, "The President and the Price of Gas"?

• 1:47Nick Capodice?

  It is, and he's saying pretty much the same thing. In fact, Hannah, I have the tape of what he said four years ago.

• 1:53Speaker 02

  There are very few handles that a president has to influence gas prices in the short term.

• 1:59Hannah McCarthy?

  So, so far, nothing's changed.

• 2:01Nick Capodice?

  So far. But I wanted to come back to this topic, Hannah, because I filled my tank this week, and it was a lot more money than it was the week before. And of course, I had been reading about what's going on in Iran. And I said to myself, can we really not blame the president for the price of gas prices? Really? So I called him up and had a little chat. This is, by the way, Robert Rapier.

• 2:25Speaker 02

  My name is Robert Rapier. I'm a chemical engineer. I've spent a career in the energy industry and I write and cover the energy industry.

• 2:33Nick Capodice?

  So quickest recap ever. Here are the things that a president can do to reduce the price of gasoline.

• 2:40Speaker 02

  One of those is the Strategic Petroleum Reserve. So when oil prices are spiking, we have a large Strategic Petroleum Reserve that presidents can use to release oil and help put more supply on the market and bring prices down. That's one of the handles a president has. The other is, you know, they could hypothetically waive taxes in a short period to reduce prices.

• 3:04Nick Capodice?

  A word more on those taxes. Federal taxes make up about 18 cents per gallon of gas that you buy. And state taxes vary. They vary a lot, from nine cents a gallon in Alaska to 70 cents a gallon in California.

• 3:18Hannah McCarthy?

  And I remember that the main contributor to gas prices is the price of crude oil per barrel.

• 3:24Nick Capodice?

  That's right. As we are saying these words, Hannah, March 19th, 2026, the price of oil is $97 a barrel, up from $57 a barrel at the beginning of 2026. And you got to be careful, Hannah, because when you start your day opening up a tab with the crude oil price tracker, it can become a bit of a habit.

• 3:44Hannah McCarthy?

  And how close exactly are those two things tied? The price of crude oil and the price of gasoline?

• 3:50Speaker 02

  It's generally correlated above 90%. So generally, oil prices rise, gas prices rise. Now, there is a refining system between oil and gasoline. And sometimes that refining system can impact things in a way that oil prices are steady, but gas prices are rising, or vice versa. It just depends on what's going in the refinery. You know, longer term, it's very difficult for a president to have a big impact, but you know, pro-oil policies can help. You know, taxation, there are a lot more handles in the long run. But short term, you know, the options are pretty limited.

• 4:30Speaker 02

  There is one thing a president could do to make prices skyrocket, and that is conflict in the Middle East.

• 4:37Speaker 07

  Good afternoon, everyone. We are interrupting the game for just a moment here because there is major breaking news at this hour. ABC News has just learned that Iran's supreme leader, the Ayatollah Ali Khomeini, is believed to have been killed in the attack in Iran. President Trump just moments ago confirming the news in a social media post. Killed in that attack led by US and Israeli.

• 4:58Hannah McCarthy?

  How much of the world's oil comes out of the Middle East?

• 5:02Nick Capodice?

  That is a tricky question. It's about 30%. North America is the number one region, producing 31%. And I say it's tricky because oil from different places is different oil. It costs more or less to extract, to refine, et cetera.

• 5:19Hannah McCarthy?

  And when did we start depending on oil production in the Middle East?

• 5:22Nick Capodice?

  That started in a big way in the 1950s. And by the 1970s, the world market was completely dependent on oil from the Middle East, which is why conflict in the Middle East has an immediate effect on the price of crude and therefore the price of gas.

• 5:39Speaker 02

  You know, when we talk about tensions in the Middle East, we're talking about a few scenarios that could unfold, that could dramatically increase the price of oil. And I call these the nuclear scenarios.

• 5:53Hannah McCarthy?

  The nuclear scenarios?

• 5:55Nick Capodice?

  Yeah. Doesn't mince words that, Robert Rapier. So here they are.

• 6:01Speaker 02

  One nuclear scenario is that Saudi Arabia, the region's largest producer, gets dragged into a full-blown war and their oil-producing facilities or exporting facilities are damaged. That's a nuclear scenario. Nuclear scenario is two or three of the large producers in the area get dragged into a conflict. But the other nuclear scenario is the one that has just happened, and that is Iran closes down the Strait of Hormuz.

• 6:24Speaker 08

  Iran flexing its muscle, launching projectiles and planting mines. They're exerting control over this key route, targeting ships that have passed through the narrow waterway. Iran vows to strike any ship linked to the US, Israel, or their allies that passes through here.

• 6:40Speaker 02

  That's actually worse than the others because 20 million barrels a day and another 2 million barrel oil equivalent of liquid natural gas pass through that strait every day under normal circumstances. That's 20% of the world's oil supply.

• 6:56Nick Capodice?

  On February 28th, 2026, the United States and Israel conducted a surprise attack on Iran. Iran's Health Ministry reports that so far, about 1,500 Iranian civilians have been killed, including 165 at a strike on a school, and 18,500 people have been wounded. Now, I do not have an accurate number of Iranian military killed in battle. The United States and Israel says it's about 6,000 Iranian soldiers, and the United States has reported the loss of 13 US service members in the conflict so far.

• 7:34Hannah McCarthy?

  And what is the stated reason for this attack?

• 7:37Speaker 09

  If you had to explain in 10 seconds, why did we go to war now? It's a very good question. And the truth is, we don't know the answer. Right? They have given us multiple versions of that story all week.

• 7:50Nick Capodice?

  So collecting Donald Trump's Truth Social posts, along with statements by Secretary of War Pete Hegseth, Secretary of State Marco Rubio, and US Ambassador to the UN Mike Walz, in the first week of the war, I read nine different, sometimes conflicting, explanations. From preventing nuclear weapons, to inciting a regime change, to preempting Iran attacking us, to destroying Iran's missile capabilities, to securing resources. As GOP Senator Lindsey Graham said when he went on Fox News, quote,

• 8:26Speaker 10

  "When this regime goes down, we're going to have a new Mideast. We're going to make a ton of money."

• 8:32Hannah McCarthy?

  So Robert said that 20 million barrels of oil go through the Strait of Hormuz. And this isn't a large body of water, right? It's relatively small.

• 8:42Nick Capodice?

  It's not big. There's no way to sneak through it. It's, you know, it's 100 miles long, 20 miles wide. Iran can lay mines. They can fire on any tankers they see with ease.

• 8:54Hannah McCarthy?

  Is there no other route these ships can take?

• 8:57Nick Capodice?

  No.

• 8:59Speaker 02

  So if you if you look at the Strait of Hormuz to the north, I mean, it's a it's a dead end. You know, it goes up to Kuwait and it's able to pick up oil and natural gas from Qatar and different places. But there's no other way out. There are, you know, Saudi Arabia has a pipeline that goes across. There's a pipeline that goes to the north, but those are all very limited. I mean, 20 million barrels a day is a staggering amount of oil to move. You know, no pipeline is moving that amount. So those ships, constant traffic. And if you if you look, you know, there's a site out there, marine traffic dot com. If you go look, you can see there is absolutely no ship traffic going through the Strait of Hormuz. And it's normally just constant. If you use that site and you pop

• 9:42Speaker 02

  over to the Red Sea, you can just see red red lines of ships going all up and down that, going up to the Suez Canal and going through. But going through the Strait of Hormuz, there's absolutely nothing going on right now. And it's usually very, very busy traffic through there. People talk about it being one of the most important choke points. It is the most important choke point for energy in the world.

• 10:05Hannah McCarthy?

  Did you go to marine traffic dot com?

• 10:07Nick Capodice?

  I did, and added yet another daily tab that I can't stop checking. But again, no way out, no way around. It is entirely in Iran's hands.

• 10:18Speaker 02

  No other country ever in history has had the ability to control that much of the world's oil supply, ever. So Iran with, you know, I mean, this is why this is why presidents have been hesitant to attack Iran.

• 10:30Speaker 11

  I did criticize the president because of our undercutting of what was a stalwart ally, the Shah of Iran. We want better relations with Iran. I remember when we had good relations. We liked the Iranian people. Well, I could have been reelected if I had taken military action against Iran, but it's shown that I was strong and resolute and manly and so forth. But I think if I I could have wiped Iran off the map with the weapons that we had. But in the process, a lot of innocent people would have been killed, probably including, you know, hostages.

• 11:02Speaker 02

  Because while it is a nuclear option for them, it is an option. And it's gonna, I mean, everybody's gonna suffer, not just the United States. Everybody in the world who uses fuel is gonna suffer because we just took offline 20% of the world's supplies. And so now, we are scrambling to fill those gaps.

• 11:24Nick Capodice?

  And it is not just oil, Hannah. As important as oil is, it's not the be all end all here. Other ships, carrying a lot of other stuff, go through there as well.

• 11:35Speaker 02

  And it's also, you know, critical supply route for fertilizer. For, you know, trade in general, a lot of container ships go through there. And when you think about what's being disrupted, those ships are all scheduled. You know, they're supposed to be somewhere else now. You've got a lot of ships that are trapped inside, you know, to the north and they can't get out. They're stuck. So there's going to be a disruption of trade here. That's going to be, I think reminiscent of COVID. When we saw, you know, supplies get disrupted, supply chains get disrupted. I think we're going to see that right now. We're going to see, you know, some, some problems. I think we've just scratched the surface of what we could see. I mean, it largely depends on Iran and how much they want to dig in here.

• 12:19Speaker 02

  But they could bring the global economy to its knees.

• 12:23Hannah McCarthy?

  That is a grim picture. Does Robert have any ideas in terms of what we can do? Or rather, what America can do?

• 12:31Nick Capodice?

  He's got a couple and we're going to get to that right after a quick break.

• 12:39Nick Capodice?

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• 13:46Nick Capodice?

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• 16:03Nick Capodice?

  We're back. This is Civics 101. Today, we are talking about the way a president can affect the price of gas, namely by attacking Iran.

• 16:12Hannah McCarthy?

  So, we have a gap right now. 20% of the world's oil is stuck in the Persian Gulf, not to mention myriad other container ships. What can the world do to make up for all of that missing oil?

• 16:25Speaker 02

  And the math says you could maybe, best case, short term, fill about half that gap. You could maybe come up with 10 million barrels, and that's draining strategic petroleum reserves from Europe and from, you know, G7 countries and from the United States. So, that only gives you a boost for, you know, a month or six weeks, and then you're back to, you know, if the Strait is still closed, then you're in some real pain. Then that supply goes off. You know, there are some other options. Saudi has an underutilized crude oil line going west to the Red Sea, and they have proposed to push more crude

• 17:05Speaker 02

  in that direction. Iran has let some ships go through that are going to China, so that helps a little bit. And the US has offered a waiver to Russia to allow them to sell oil to India, which ironically helps Russia continue to fight against Ukraine. It gives them cash that they need. So, you know, it's a win-win for Russia. When you talk about who wins out of this, I mean, Russia comes out of this as one of the biggest winners. They undoubtedly would like to see this go on as long as possible and see oil prices $100, $150. I mean, that's just gold for Russia.

• 17:41Hannah McCarthy?

  What is the highest oil barrel prices have ever been?

• 17:44Nick Capodice?

  There was a spike in 2008 that led oil to be $147 a barrel, but that really was a spike. By the end of the year, it was back down to $40 a barrel.

• 17:55Hannah McCarthy?

  Has anyone suggested how high it could go as a result of this conflict?

• 17:59Nick Capodice?

  Lots of folks have speculated. Last week, a market analyst on NBC said, quote, "I wouldn't be surprised if oil went to $200 or even $250, because commodity prices go parabolic when there's a shortage of supply."

• 18:13Hannah McCarthy?

  So, what can we do?

• 18:14Nick Capodice?

  In the short term, I don't know if there's anything we can do. Because this was a complete surprise and nobody had planned for it.

• 18:23Speaker 02

  In the long term, if you said, you know, over the next five years, we're going to be missing 20 million barrels of oil a day, there are things that producers would do. They'd go out and they'd make investments and so forth. We don't really know how high oil prices could go. Because the question I ask people is, how much would you pay for gasoline before you stop buying gasoline? And most people go, well, I don't have a choice. I have to drive back and forth to work. Right. So if you're paying $4 now and gasoline is $10, would you stop driving? And people go, well, I couldn't. I mean, I couldn't afford that, but I also couldn't stop driving.

• 19:01Nick Capodice?

  But after a long time of $10 a gallon for gas, people are gonna change. People will use public transit, they'll use car pools. Eventually, consumption will lessen.

• 19:16Speaker 02

  But, you know, until a lot of consumption falls off, if Iran digs in their heels here, we're in for a very rough time. And I would expect us to go into recession if oil prices go above $100 and stay there. Which, right now, from my view, they should be above $100, given that Iran is, looks like they're digging in. And, you know, there's just, there's just not enough supply right now. I mean, the world is vastly underproducing what the world is demanding right now, because it's just not moving through there. It's a, this is huge. Yeah, I got up and I said, I think this is a huge, huge miscalculation. And, you know, we'll see how it goes.

• 20:02Hannah McCarthy?

  That leaves me thinking about the very last thing a president can do to affect gas prices. And look, I know the Constitution says, "Congress declares war," not the president. We have not declared war since World War II, by the way. But could this lead to a larger war?

• 20:20Nick Capodice?

  Robert says that is definitely a possibility.

• 20:23Speaker 02

  We'll look back. I think this will be one for the history books. We'll look back and we'll go, this was a crisis that, you know, this is why people in the past have been very, very hesitant. As much as people view Iran as a problem to be, to be dealt with, the reason people haven't dealt with them is what we're experiencing right now because they can shut down that Strait of Hormuz. And, and why is that? Because it cuts deeply into their territory right there at a very narrow point. And they can surround it on three sides. And they, they, they can, I mean, you have to come very close to Iran getting a ship through there. And they can, they can just stop traffic. They can bombard

• 21:04Speaker 02

  things coming through there. And that's going to put immense pressure, I think, on President Trump to put ground troops in there. I, I think if, if you ask me what's going to happen, I would predict that we're going to have to put ground troops in there. If, if Iran refuses to open it up. I think that's going to be where the pressure is. Not that I want to see that. I absolutely don't want to see it. But I think that's the pressure that's going to, going to come.

• 21:32Nick Capodice?

  Well, that's the president and the price of gas, part two. Not a replay, a redux. Rebecca was like, don't let people think it's the same episode. Because it sure isn't. Isn't the same anything. This episode was made by me, Nick Capodice, with Hannah McCarthy. As always, thank you, Hannah. Our producer is Marina Henke, and our executive producer, the aforementioned Rebecca Lavoy. Music in this episode from Blue Dot Sessions, Epidemic Sound, and the beautiful Chris Sabriski. Civics 101 is a production of NHPR, New Hampshire Public Radio.

• 22:13Nick Capodice?

  What does it really take to start a startup? I'm David Rosenko, entrepreneur, investor, and the host of Leap Forward. In each episode, I go behind the scenes with successful founders and someone who knew them before they were famous. Their college roommate, their first employee, or their mom. To hear the sometimes uncomfortable, but very real inside stories of how companies actually get built. Companies like Reddit, Airbnb, or Twitch. Listen to the new season of Leap Forward for never-before- heard stories behind the world's most iconic companies.