The political clash unfolded against a backdrop of significant disruption in global energy markets. Oil prices hit $100 a barrel again, having jumped to nearly $120 earlier, according to market reports. This uncertainty in oil markets is linked to Iran effectively closing the Strait of Hormuz, a critical chokepoint that carries around a fifth of the world's oil, as noted by energy analysts. The U.S. military destroyed mine-laying ships near the Strait of Hormuz after reports of Iran planning to deploy mines, though some tankers are still passing through, per military sources. The specific conditions or limitations that apply to countries purchasing stranded Russian oil remain unclear.
In response to the market turmoil, the U.S. Treasury Department announced it would allow countries to purchase Russian oil 'currently stranded at sea.' Treasury Secretary Scott Bessent stated this was a 'short-term measure' to promote stability in global energy markets and keep prices low. He claimed the measure 'will not provide significant financial benefit to the Russian government.' Separately, the Trump administration has allowed India to buy Russian oil until April 4, according to administration officials. The Trump administration also plans to tap U.S. oil reserves, with Energy Secretary Chris Wright announcing the release of 172 million barrels from the Strategic Petroleum Reserve. How effective this release has been in stabilizing oil prices is not yet known.
This was a 'short-term measure' to promote stability in global energy markets and keep prices low.
California Governor Gavin Newsom launched a direct attack on President Trump in this context. Newsom criticized President Donald Trump by sharing an AI-generated image depicting Putin walking Trump like a dog, as reported by his social media posts. Furthermore, Governor Newsom called Trump a 'brain-dead moron who bombs children,' seemingly referring to a February 28 strike on a girls' school in Iran. A February 28 strike on a girls' school in Iran reportedly killed about 175 people, mostly children, based on local accounts. A preliminary Pentagon report found the U.S. responsible for the unintentional bombing of the girls' school in Iran, according to The New York Times. The details and findings of that Pentagon report have not been fully disclosed.
Newsom's criticism extended to domestic economic concerns, as he blamed record-high gas prices in his state on President Trump's war in Iran. This prompted criticism from Trump supporters and Republican politicians who attribute the prices to Newsom's environmental policies and state taxes. Earlier in March, Gavin Newsom had also likened Israel to an apartheid state and criticized its joint war with the US against Iran during a public appearance in Los Angeles, as covered by media outlets.
It 'will not provide significant financial benefit to the Russian government.'
The administration proposed additional measures to secure oil flows. Treasury Secretary Scott Bessent suggested the Navy or an international coalition could escort oil tankers through the Strait of Hormuz, according to his statements. What international coalition, if any, is being formed for this purpose is currently unknown. The current status of Iran's closure of the strait and its precise impact on global oil shipments also remains a key uncertainty for markets.
The events highlight a deepening political divide over foreign policy and economic management, with Newsom positioning himself as a leading critic of the administration's actions. The combination of military action, market intervention, and sharp political rhetoric underscores the high stakes of the ongoing conflict and its domestic repercussions. The ongoing volatility in oil markets continues to pose challenges for global energy security and economic stability.