By Gloria Ogbonna
During a Tuesday appearance on Rob Schmitt Tonight on Newsmax, White House Senior Counselor for Trade and Manufacturing Peter Navarro discussed rising tensions involving Iran and argued that the country’s geopolitical actions have long imposed what he called an “Iran terror premium” on global oil prices.
Speaking with host Rob Schmitt, Navarro explained that beyond immediate national security concerns, Iran’s influence in the Middle East has contributed to higher energy prices around the world for decades. According to him, the ongoing threat posed by Iran’s military capabilities and regional proxy groups has created persistent uncertainty in global energy markets.
Navarro said the issue goes beyond the presence of ballistic missile programs and nuclear ambitions.
“It’s not just that there’s an imminent national security threat because of the ballistic missiles and the nukes that Iran has,” Navarro said during the interview. “It’s also this Iran terror premium that the United States and the rest of the world have been paying for decades through higher oil prices.”
Navarro pointed out that President Donald Trump has repeatedly argued that once tensions surrounding Iran are resolved, global oil prices could decline significantly. He noted that White House Press Secretary Karoline Leavitt echoed that message earlier in the day, saying that oil prices could eventually return to around $60 per barrel or even fall lower over time if geopolitical risks tied to Iran are reduced.
Navarro explained that the so-called “Iran terror premium” refers to the additional cost built into oil prices because of instability and security threats associated with Iran and its regional activities. For more than four decades, he said, markets have priced in the risk of conflict, disruption of shipping routes, or attacks by Iranian-backed groups.
“Because of the geopolitical risk associated with Iran’s terror activities and its support for proxy groups like Hamas, Hezbollah, and the Houthis, oil prices have been elevated above what normal market conditions would dictate,” Navarro said.
According to Navarro, various studies have suggested that the geopolitical uncertainty linked to Iran has increased the price of oil by roughly $5 to $15 per barrel compared to what prices might have been in a more stable geopolitical environment.
Over time, he said, those elevated energy costs have had a cumulative effect on the global economy.
“What that means in practical terms is that the world economy has effectively paid trillions of dollars more for energy,” Navarro said. “Over the last 45 years, that premium has contributed to slower economic growth worldwide.”
Navarro claimed the long-term economic impact has been enormous, estimating that the drag on global economic activity has cost roughly $10 trillion in lost or reduced gross domestic product over the decades.
A major factor behind this risk premium, Navarro argued, is Iran’s geographic position near one of the world’s most critical energy chokepoints — the Strait of Hormuz. The narrow waterway connects the Persian Gulf to the open ocean and serves as a key route for global oil shipments, with a significant percentage of the world’s crude oil supply passing through it each day.
Because of its strategic location, Navarro said instability involving Iran creates constant uncertainty about whether oil shipments through the strait could be disrupted.
“That’s where this issue really centers,” Navarro explained. “It all hovers around the Strait of Hormuz and the accident of geography that places Iran so close to this critical passageway for global energy.”
Navarro argued that addressing the threat posed by Iran could remove that longstanding risk from global energy markets. If the geopolitical instability were resolved, he said, it could eliminate the “terror premium” that has been built into oil prices for decades.
“To neutralize the Iranian terror threat is essentially to remove this Iran terror premium from the global oil market,” Navarro said. “And that would benefit not just the United States, but economies around the world.”
He also emphasized that the United States has the ability to maintain strong domestic energy production, pointing to the country’s potential for energy independence. However, he said the broader goal should also include stabilizing global oil markets so they are less vulnerable to geopolitical disruptions.
Navarro described President Trump’s approach as a long-term strategy aimed at strengthening both U.S. energy security and the global economy.
“We will and can be energy independent,” Navarro said. “But the president understands something bigger than that. Having a stable global oil market that isn’t subject to the Iran terror premium is key to global prosperity.”
He concluded by reiterating the scale of the economic impact he believes Iran-related instability has had on the world economy.
“Over the years, this geopolitical risk has effectively extracted around $10 trillion from the global economy through slower growth,” Navarro said. “That kind of economic drag has to stop.”
Source Breitbart
Original article
Comments