Nobel Prize-winning economist Paul Krugman criticized the Trump administration for failing to anticipate the economic consequences of striking Iran, particularly soaring oil prices. Krugman wrote that decision-makers "should have seen this coming," but evidence suggests they didn't prepare for the resulting crisis. Despite U.S. oil self-sufficiency, the closure of the Strait of Hormuz caused American gasoline, diesel, and heating oil prices to surge because oil trades on global markets at roughly uniform prices worldwide. Krugman explained that U.S. oil exports and imports don't insulate the economy from Middle East disruptions. He contrasted this with 1970s price controls that temporarily shielded consumers but created shortages. Krugman argued modern political conditions make such protections unlikely, leaving Americans vulnerable to global oil market volatility triggered by geopolitical conflict.
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