Oil prices hit $108 a barrel this weekend. Gas is climbing past $3.45. The usual suspects are invoking the 1970s. Democrats smell a repeat of Biden's inflation nightmare — and on the surface, they have a point. Nothing sinks a presidency faster than the price at the pump.

But here’s what the evidence actually suggests: the White House isn’t fighting the price spike. It’s using it.

Trump said it himself Sunday. Rising oil prices are “a very small price to pay” for “U.S.A., and World, Safety and Peace.” He added: “ONLY FOOLS WOULD THINK DIFFERENTLY.” That is not damage control language. That is the language of a president who saw the spike coming.

The question is why. And the answer runs through Beijing.

The Asymmetry

The United States consumed 4% less gasoline in 2025 than in 2007 while producing 42% more GDP. Energy accounts for 3.7% of American household spending — down from 5.7% two decades ago.

U.S. natural gas prices rose 11% last week. In Europe, they rose 67%. South Korea’s stock market dropped 11%. Japan’s Nikkei fell more than 5%. The S&P 500 fell 2%. America feels this spike. It doesn’t break from it.

China’s position is the inverse.

Beijing imports roughly 11 million barrels of oil per day. Iran and Venezuela — both now effectively offline — supplied approximately 1.77 million of those barrels at steep discounts. That’s 17% of China’s seaborne crude intake, gone. Russia can backfill maybe 300,000 to 500,000 barrels in the short term — covering less than a third of the gap. China has strategic reserves, enough for an estimated 75 to 120 days. But reserves are a clock, not a solution. They drain.

And the oil market is not a free market. It has never been. OPEC manages supply. Russia weaponized energy against Europe in 2022. The United States reportedly considered having Treasury intervene in oil futures to push prices down — and shelved the plan. The one tool designed to lower prices, and they chose not to use it. That’s evidence worth weighing.

The Corridor Map

Energy economist Anas Alhajji, formerly chief economist at NGP Energy Capital Management, laid out a framework this week that makes sense of what otherwise looks like disconnected moves.

The United States now controls or influences every major energy transit corridor on earth. The Panama Canal — Chinese-affiliated port concessions terminated. The Red Sea — patrolled at both ends. The Strait of Hormuz — U.S. Navy on station, Iran’s naval capacity destroyed, government-backed shipping insurance being negotiated with Lloyd’s for tanker escorts.

The remaining gap on the corridor map: the Northern Sea Route through the Arctic. That requires Greenland.

Alhajji’s key insight is the insurance mechanism. By providing escort and government-backed insurance for Hormuz transits, the United States has effectively positioned itself as gatekeeper of the strait without planting a flag on it. Washington controls the flow. And the insurance and protection costs raise the delivered price of Gulf energy for every buyer — except America, which doesn’t ship through Hormuz.

The effects extend beyond crude. Disrupting helium exports from the Gulf hits Asian semiconductor manufacturing. Stopping methanol exports pressures Chinese, South Korean, and Japanese industry. Cutting fertilizer flows squeezes India’s agricultural sector. Each of these is a pressure point on economies that built their industrial base on the assumption that Gulf supply corridors would remain open and cheap.

The China Squeeze

If the pattern holds, this is not an Iran war with China side effects. It is a China strategy executed on an Iranian battlefield. Venezuela was taken offline in January. Iran has been under sustained bombardment since February 28. Both were Beijing’s discount energy lifelines. The sequencing — cut the cheap supply, raise the global price, position America as the only reliable seller — is consistent with a deliberate campaign, not collateral damage. The military case for that reading is already strong, as I argued last week. The economic architecture is catching up.

Trump’s November 2025 National Security Strategy supports this reading. The document identifies energy dominance and AI leadership as the twin pillars of American power. It explicitly treats cheap domestic energy as a competitive weapon — abundant for American industry, expensive for competitors. What looks like a market disruption tracks with a strategy document coming to life.

And the calendar matters. Trump visits Beijing on March 31 for the first presidential trip to China since 2017. China arrives at that summit having lost its Venezuelan supply chain, its Iranian supply chain, and its leverage over Gulf shipping lanes. Its defense exports just failed in live combat. Its ally Russia collected oil windfall revenue from the sidelines and offered nothing beyond verbal condemnation.

But Beijing is not standing still. China’s signaling this week is telling: despite losing two energy partners in two months, the CCP still wants the summit. Wang Yi said the agenda for high-level exchanges “is already on the table” and called for both sides to “make thorough preparations.” That is not the posture of a country in panic. It is the posture of a country recalculating its leverage and looking for the best deal available under worsening conditions.

Russia, meanwhile, benefits from the chaos — higher oil prices fill Moscow’s war chest even as its Iranian proxy burns. The DragonBear alliance hasn’t collapsed. It’s adapting.

This is realpolitik, not a movie.

The Domestic Gamble

None of this changes what happens at the gas pump. Working families don’t negotiate in geopolitical leverage. They negotiate in gas prices and grocery bills. If the Strait of Hormuz stays closed through March, daily output in the region could fall by nine million barrels — nearly a tenth of global demand. Inflation-linked derivatives already imply consumer prices will run at 2.9% over the next year, up from 2.4% in January. February payrolls dropped 92,000.

If Trump pressures the Fed to cut rates rather than hold firm, a temporary price spike becomes entrenched inflation. The 1970s didn’t happen because oil prices rose. They happened because the Federal Reserve cut too much under political pressure. That risk is not theoretical.

There is also the question of whether Trump holds. Markets have a name for this pattern — TACO, shorthand for Trump Always Chickens Out under sustained market pressure. He could reverse course, release strategic reserves, lean on Saudi Arabia to ramp production, and kill the leverage play in exchange for short-term price relief. The strategy only works if the administration rides out the pain long enough for it to produce results at the negotiating table. That is not guaranteed.

The Bet

The administration’s wager is that Hormuz reopens within weeks, not months. Energy Secretary Chris Wright said Sunday that “energy will flow soon” through the strait. Iran’s military capacity is shattered — its ballistic missile launches dropped 90% from the first day of fighting, its navy is sunk, and the threat to tanker traffic degrades by the day. Unlike the 1970s, the United States is the world’s largest producer of oil and natural gas, not a hostage to Middle Eastern supply. The question is duration. And duration favors America.

In three weeks, Trump sits in Beijing across from Xi Jinping. He arrives controlling the Panama Canal, Venezuelan oil production, and the Strait of Hormuz. China arrives having lost its discount energy, its defense credibility, and its proxy in Tehran. The oil price is the message: America can make energy cheap for itself and expensive for everyone else. And it just demonstrated the willingness to do it.

The pundits are asking whether expensive gas sinks this presidency the way it sank the last one. It’s a fair question. But it may be the wrong one. The right question is whether a few weeks of pain at the pump buys the most consequential shift in great-power leverage in a generation. That is the bet the White House appears to be making. Whether it pays off depends on what happens in Beijing on March 31 — and whether the administration has the discipline to hold until then.