Why Gas Won’t Drop Back to $3 After Trump’s Iran Deal

Trump is attending a G7 summit in France. (Reuters)
Reuters
By Yuval Rosenberg and Michael Rainey

Happy Monday! New York City is still riding the high of the Knicks' championship - and likely will be at least until Thursday's ticker-tape parade through the Canyon of Heroes in lower Manhattan. President Trump, meanwhile, is touting his own historic achievement: a framework agreement for a deal to end the Iran war and reopen the Strait of Hormuz. Details about the deal remain scarce, and U.S. and Iranian officials have made conflicting claims about what it includes, but the most contentious topics have been put off until a later round of talks. For now, a ceremonial signing ceremony is set to take place in Geneva on Friday, to be followed by a 60-day negotiating period aimed at reaching a more comprehensive deal. Here's what else is happening.

Why Gas Won't Drop Back to $3 After Trump's Iran Deal

The average price of a gallon of gasoline fell to $4.06 on Monday following President Trump's announcement that the United States and Iran had reached an agreement to end hostilities and reopen the Strait of Hormuz.

U.S. gas prices rose sharply after the United States and Israel started bombing Iran on February 28, rising from less than $3 a gallon on average to a peak of $4.56 in the third week of May, per AAA. Prices have moved lower since then, falling for three straight weeks as oil prices retreated.

With crude oil prices moving toward multi-month lows, the downward trend in gas prices could continue. U.S. crude futures slipped below $80 a barrel on Monday for the first time since early March, according to CNBC, while Brent crude futures fell to roughly $83.

The road to even lower prices for oil and gas could be long and bumpy, though. There are still questions about the details of the agreement between the United States and Iran, with officials from each country making conflicting statements about possible tolls for crossing the Strait of Hormuz. Even if the agreement rolls out smoothly and as promised, energy experts have warned that it could take months for oil to begin moving normally again. According to CNN's David Goldman, futures indicate that traders don't expect crude oil prices to fall below $70 per barrel until 2031.

Dan Pickering, chief investment officer at Pickering Energy Partners, told CNN that gas prices probably aren't headed back to their pre-war levels. "We'll figure out what the new normal is," he said. "But it isn't going to be $2.85 gasoline."

Judge Extends Block on Trump's $1.8 Billion 'Anti-Weaponization' Fund

A federal judge on Friday indefinitely extended a block preventing the Trump administration from moving ahead with its $1.8 billion "anti-weaponization" fund, ruling that the government has not provided "absolute certainty" that the supposedly abandoned fund is truly dead, as Acting Attorney General Todd Blanche told lawmakers.

Judge Leonie Brinkema in the Eastern District of Virginia rejected an argument by government lawyers that extending her earlier, temporary block on the fund would be moot because the Trump administration was not moving ahead with its plan. President Trump has defended the fund and suggested that he still wants it. When the president says he wants something, Brinkema reportedly said in court, "that's a pretty good indicator there will be an incentive and motive to make it happen."

In a written order, the judge said that, in order to avoid further litigation in the case, Trump administration officials must file a declaration under penalty of perjury "that they will not take any action to create or operate the Anti-Weaponization Fund, and that the Anti-Weaponization Fund will not proceed in any manner, or under any name." She gave the officials until June 19 to do so and said that the case will proceed if they do not.

The plaintiffs in the case include a fired former federal prosecutor, a college professor, a nonpartisan government watchdog group, the city of New Haven, Conn., and the National Abortion Federation. They argue that the Justice Department's planned fund is unconstitutional because it bypasses Congress's authority over federal spending. They add that the fund would improperly exclude people who claim to have been targeted by the Trump administration.

"We've successfully locked the President's personal slush fund for now, and we'll keep the pressure on until it's shut down for good," said Omar Noureldin, senior vice president for policy and litigation at Common Cause, a pro-democracy watchdog group. He called the judge's order "a massive win, ensuring hard-earned tax dollars stay out of the hands of the President's cronies and people who violently assaulted law enforcement on January 6."

Two days before Brinkema issued her order, a different federal judge declined to formally block the Trump administration's payout fund, saying that he would rely on the Justice Department's statements that the fund was dead. But Judge Richard J. Leon of the District of Columbia warned the administration that he could change his mind if it took steps to revive the fund

"Don't play possum with this court," he said.

The bottom line: Senators who oppose the "anti-weaponization" fund failed this month to formally block it, but Brinkema has done so, and the legal challenges seeking to prevent the fund from being created will continue.

Quote of the Day: Social Security Scare

"These are the things that nobody wants to touch because they're so big. The only way they happen is if they are a bipartisan effort from the get-go."

− Alaska Republican Sen. Lisa Murkowski, as quoted at The Hill in a piece detailing a divide among GOP lawmakers over potential Social Security reforms in the wake of a trustees' report last week that said the program's main trust fund is projected to be exhausted by late 2032.

While fiscal conservatives welcome the idea of Social Security reform and Speaker Mike Johnson recently called for his party to address the issue if it keeps control of Congress next year, some Republicans are wary of sparking voter anger ahead of November's midterm elections. Republicans are "not going to walk the plank on Social Security reform all by themselves," one unnamed GOP senator told The Hill.

Democratic Sen. Tim Kaine, who was part of a bipartisan group of four senators who last week called on Congress to take action to address Social Security's finances, acknowledged to The Hill that the chances of lawmakers doing something in the next Congress are low.

"The Vegas odds probably are not great because the history is we tackle it when we absolutely have to, right when we're up against a potential benefits cut," he said.

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