Foreign Policy

Matthew Petti | 2.24.2025 10:24 AM

The law of supply and demand is the most basic insight in economics. When there's more of a good available for sale than people who want to buy it, the price goes down, and when more people want to buy the good than is available, the price goes up. As progressives have learned the hard way with housing, there is no magical government intervention to get around this.

That law presents a bit of a problem for President Donald Trump's agenda on oil. On one hand, Trump ran on criticisms of Biden-era inflation, including high gas prices. He also wants to drive down oil prices to pressure Russia. On the other hand, Trump wants to cut off Iranian oil exports in order to "bankrupt" the country and build leverage in negotiations.

In other words, he's trying to both increase and reduce the oil supply at the same time.

Last week, the Trump administration claimed that it found a way to square the circle. The government of Iraq suddenly announced last Monday that it would resume exporting Kurdish oil after resolving a

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