Brent crude rose 4.6% to $87.13 a barrel on Tuesday as tensions in the Strait of Hormuz rattled energy markets, with the United States and Iran each saying the waterway is under its control. The fight over a narrow shipping route, and the price shock that follows it, landed first on ordinary people buying fuel, paying rent, and trying to keep the lights on.
Who Holds the Switch
The Financial Times said oil touched $87 as the battle for the strait alarmed energy markets. That’s the language of the people who profit from the choke points. The market moved fast. The rest of the world gets the bill.
U.S. inflation cooled in June as gas, clothes and used-car prices fell, but renewed conflict in the Middle East threatened to reverse that progress. Consumer prices dropped 0.4% from May to June, the largest monthly decline in four years, according to the Labor Department. On a yearly basis, inflation fell to 3.5% from 4.2% in May. Excluding food and energy, core prices were unchanged from May to June and rose 2.6% from a year earlier, down from 2.9% the previous month.
The report said electricity prices fell 1% from May to June, clothing prices dropped 0.6%, groceries rose 0.2% and apartment rental costs rose 0.1%. Gas prices had risen about 6 cents a gallon in the past week to a nationwide average of $3.86 a gallon. Small numbers, big consequences. A few cents here, a few points there, and the people at the bottom are told to call it stability.
The People Paying for the Crisis
President Donald Trump said Tuesday, “It’s not my fault,” and added, “We are putting it to sleep. ... Inflation is way down.” He also said, “Remember that for the midterms.” The line lands like campaign theater, with the same old promise that the ballot box will somehow tame the machinery that keeps squeezing everyone.
Fed Chair Kevin Warsh said in written testimony to the House Financial Services Committee that the Fed has “no tolerance” for high inflation and pledged it would become “a thing of the past.” He gave no hints about what steps the Fed may take in coming months. Kathy Bostjancic, chief economist at Nationwide Financial, said, “Today’s report gave some breathing room for the Federal Reserve in deciding whether and when to raise interest rates.” Michael Metcalfe, head of macro strategy at State Street Markets, said, “This reading is very much in the camp that the inflation we’ve had this year is transitory,” and added, “Yes, gas prices went up, but nothing else did, more or less.”
That’s the hierarchy speaking in polished tones. The Fed, the House committee, the financial firms, the White House. Different suits, same structure. They debate timing and optics while the costs land on workers, renters, and anyone who has to buy gas to get to work.
Blackouts, Shortages, and Improvisation
Cuba plunged into a third nationwide blackout in two weeks because of fuel shortages. In Havana, the blackout left the entire country without power after a problem with a generating unit in Holguín caused “a sudden frequency change,” according to the state-owned Electric Union. The Ministry of Energy and Mines and the Electric Union said “protocols for its restoration have been activated,” with “micro-islands” being established and then interconnected to provide power to priority locations such as hospitals and food processing plants.
By the afternoon, some parts of Havana had power restored, and authorities said 4% of the city had electricity. Guantánamo and Cienfuegos said they had begun distributing power to their hospitals, and Matanzas said power had been restored to the city’s historic center. The language of restoration sounds tidy. The reality is a country split into priority zones, with hospitals and food processing plants first in line while everyone else waits in the dark.
The AP said fuel has been running out across Cuba since January, when President Donald Trump threatened tariffs on any country that sells or provides oil to the island, deepening the island’s ongoing economic and financial crisis. Public transportation has largely been halted, and officials have canceled tens of thousands of surgeries. Cuba produces only 40% of the fuel it needs, and a solution for fuel imports is not yet in sight.
Last week, two nationwide blackouts on Monday and Friday left more than 9 million Cubans in the dark, adding to two others in March and several regional outages. The blackouts have affected transportation, work hours, flight schedules, cooking, water supply, internet and telephone service. Roberto Liana, 69, a retail store clerk, said, “These blackouts are normal in Cuba now. If something else happened, it would be strange.” Sayli Aguilera, 25, a mother of two, said, “We’re improvising and doing what we can.”
That’s the real report. Not the speeches. Not the committee testimony. People improvising while the grid fails, the fuel dries up, and the powerful argue over control of the routes, the rates, and the wreckage.