Are Higher Oil Prices the New Normal?

Summary

WSJ What’s News – Episode Summary

Episode Title: Are Higher Oil Prices the New Normal?
Air Date: March 24, 2026
Host: Luke Vargas, The Wall Street Journal

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Overview

This episode of "What’s News" delves into the ongoing global impacts of surging oil prices amidst Middle East conflict, particularly Iran’s role in disrupting energy supplies. Through expert interviews and in-depth discussion, the podcast examines the durability of higher oil prices, what it will take to restore stability, and the broader reverberations for markets and global politics. The episode also covers notable legislative and geopolitical updates, a new EU-Australia trade deal, and significant business headlines.

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Key Discussion Points & Insights

1. U.S. Senate’s Homeland Security Funding Deal

• 00:55–02:02: Senators are nearing a deal to fund most of the Department of Homeland Security, with a focus on TSA amid growing airport delays, but with contentious ICE funding pushed aside.
• The compromise includes new oversight requirements for ICE (body cameras, clear identification), but does not resolve more divisive issues such as banning agent masks.
• Mark Wade Mullen confirmed as new Secretary of Homeland Security.

Notable Quote:

"Mullen will face the task of pushing for a deal to reopen his agent emergency and balancing the president's desire to deport large numbers of immigrants with a shift to a more low profile enforcement style." — Luke Vargas [02:02]

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2. Pentagon Press Access & Anthropic Court Battle

• 02:14–03:13: New press restrictions at the Pentagon follow a judge’s ruling labeling previous limits unconstitutional.
• 03:13–04:14: Anthropic, an AI firm, challenges its “supply chain risk” label in court, arguing government retaliation over its ethical limits on AI use.
• The Pentagon defends its actions as concerns over national security, not free speech.

Notable Quote:

“Anthropic drew red lines… in mass surveillance and autonomous weapons, leading President Trump to call it a radical left, woke company and direct every federal agency to immediately stop the use of its technology.” — Heather Somerville [03:13]

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3. Middle East Conflict and Oil Supply Disruptions

• 04:14–04:48: Iran launches fresh missile attacks after U.S. pause in strikes; Gulf states are divided over deeper involvement, seeking both an end to fighting and to prevent Iranian dominance at the Strait of Hormuz.
• 05:29–07:02: President Trump previously claimed that eliminating Iran’s nuclear threat would trigger falling oil prices. Contrary to expectations, banks and analysts now see higher prices persisting.
• Jorge Leon (Rystad Energy) explains current realities: Iran's ability to choke the Strait of Hormuz gives it long-term leverage, and damage to infrastructure is severe and enduring.

Notable Quotes:

“Everybody in the market was anticipating that this was going to be top priority for the US and governments around the world to try to reopen [the Strait of Hormuz] as fast as possible. Now, in reality, what we have seen is that it's not that simple.” — Jorge Leon [06:16]

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4. The (Long) Road to Oil Supply Recovery

• 07:02–08:24: Even if the Strait reopens, supply will not return quickly:

  • Wells have lost pressure and need time to restart.
  • Major logistical backlogs at ports.
  • Widespread infrastructure damage: refineries, pipelines, and storage hit.
  • Middle East refinery runs have plummeted from 26m to 16m barrels/day.

• Recent years’ oil investment focused mostly on the Middle East. Diversifying away will be slow and expensive.

• 08:44–09:08: Alternative sources can't fill the gap: Venezuela and U.S. shale might add up to 500,000 barrels/day—far short of the 10 million daily barrels disrupted.

Notable Quote:

“Before the conflict refinery runs in the Middle east were around 26 million barrels per day. Right now we think the refinery runs is close to 16 million barrels per day.” — Jorge Leon [07:38]

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5. Government Responses & Political Repercussions

• 09:08–09:56: The energy shortfall increases U.S. and European pressure to ease sanctions on Russian and even Iranian oil.
• Emergency consumer policies are ramping up world-wide—ranging from fuel subsidies and easing import restrictions to promoting remote work and public transport.

Notable Quote:

“I think that governments around the world are trying to find different levers to try to limit the upside price pressure and protect consumers.” — Jorge Leon [09:15]

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6. Major Trade Agreement: EU & Australia

• 10:48–11:48: The EU and Australia finalize a free trade and security partnership after eight years of negotiations, accelerated by global instability and U.S. tariff shifts.
• The focus: securing critical metals and deepening "middle powers" alliances.

Notable Quote:

“It really goes to the requirement for greater certainty around security agreements and securing things like critical metals, which Australia is a big exporter of.” — James Glynn [11:11]

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7. Market Highlights

• Estee Lauder considers a deal to acquire Spanish beauty group Puig, aiming to create a beauty giant.
• Tesla achieves its first monthly sales increase in Europe in over a year, attributed to a surge in EV market growth.
• Revolut, Europe’s top fintech, reports a 46% jump in revenue, expanding its banking presence in the UK and applying for a U.S. bank charter.

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Memorable Moments & Quotes

• “Iran… putting pressure on the US. And a way of doing that is through attacks in energy infrastructure that would hurt the US Economy through a high oil price.” — Jorge Leon [06:16]
• “The Gulf’s a little bit of two minds here. They’ve obviously been hurt very badly by the war and they don’t want it to continue. By the same token, they don’t want it to end where Iran is... in a position of power.” — Andrew Dowell [04:48]
• "If they do, you’ll hear about it here." — Luke Vargas [09:56]

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Timestamps for Major Segments

• 00:55 – Senate nears DHS funding deal
• 02:14 – Pentagon press access & Anthropic lawsuit
• 04:14 – Iran attacks, Gulf response, regional war context
• 05:29 – Trump's oil price promise; reality check
• 06:16 – Middle East energy infrastructure: Damage & recovery impediments
• 09:15 – Global government responses to high oil prices
• 10:48 – EU–Australia trade deal, global market news

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Conclusion

This episode starkly frames the reality that, despite optimistic promises of lower energy prices following military intervention, higher oil prices may be 'the new normal' due to persistent, deeply-rooted supply disruptions and slow recovery in the Middle East. Global markets and governments are scrambling for mitigation measures, while new commercial alliances and deals reflect a reshuffling world order in response to instability.

Transcript

[Heather Somerville]

This is your fix.

[Stassi Schroeder]

I am your host, Stassi Schroeder. Welcome to Tell Me Lies, the official podcast. What's the most unhinged thing of season three?

[Jorge Leon]

Steven because he's so evil, I do

[Andrew Dowell]

think he is misunderstood.

[Stassi Schroeder]

You see everyone face consequences. It's intoxicating. The writers just know how to trick. Yeah, there's always a twist in this show. Tell Me Lies the official podcast January 6th and stream the new season of Tell Me Lies January 13th on Hulu

[Luke Vargas]

and Hulu on Disney. Signs of progress in the Senate as lawmakers push to fund the tsa. Plus oil rebounds as traders assess potential long term hits to global energy supplies.

[Jorge Leon]

Before the conflict, refinery runs in the Middle east were around 26 million barrels per day. Right now, we think the refinery runs is close to 16 million barrels per day.

[Luke Vargas]

And the EU and Australia ink a free trade deal as the world's middle powers link up. It's Tuesday, Wednesday, March 24th. I'm Luke Vargas for the Wall Street Journal and here is the AM edition of what's news, the top headlines and business stories moving your world today. Senators say they are closing in on a deal to fund most of the Department of Homeland Security, including the tsa, as security lines continue to grow at airports nationwide. Carved out of the potential agreement, according to Democratic senators, would be funding for an ICE division that carries out immigrant arrests and DEP deportations. Delaware Democrat Chris Coons said the deal would broadly require ICE to wear body cameras and display identification, though it's not clear if it would address other core Democratic demands, including a ban on agents wearing masks. Meanwhile, the Senate has approved President Trump's choice to succeed Kristi Noem at DHS in a largely party line vote.

[Jorge Leon]

The ayes are 54, the nays are 45.

[Luke Vargas]

The nomination of Mark Wade Mullen of

[Andrew Dowell]

Oklahoma to be Secretary of Homeland Security is confirmed.

[Luke Vargas]

Mullen will face the task of pushing for a deal to reopen his agent emergency and balancing the president's desire to deport large numbers of immigrants with a shift to a more low profile enforcement style. Mullen's swearing in is scheduled for this afternoon. The Pentagon is once again limiting press access, including rehousing credentialed reporters outside of the building and requiring that they have escorts when inside. The restrictions come after a federal judge on Friday ruled that prior limits on reporters access to the Pentagon were unconstitutional, including forcing reporters to sign a document restricting their communication with military sources. The Defense Department has said it plans to appeal that ruling. Meanwhile, the DoD is set to meet face to face with Anthropic in court today in a dispute over the military's labeling of the company as a supply chain risk. The spat between the sides spilled out in public last month after Anthropic drew red lines around the use of its AI tools in mass surveillance and autonomous weapons, leading President Trump to call it a radical left, woke company and direct every federal agency to immediately stop the use of its technology. National tech reporter Heather Somerville told us about the court fight to come.

[Heather Somerville]

We are expecting to hear Anthropic talk about how the Pentagon has retaliated against it first, free speech and its speech should be protected under the First Amendment. It's going to talk about how the Pentagon's behavior and actions have already detrimentally impacted its business and its ability to raise money from investors has been negatively impacted. What the US Government has said in its response is that it is well within its right, it has the discretion to declare Anthropic a supply chain risk and that the government's actions are not retaliatory. They have nothing to do with free speech, but they have to do with this building mistrust of Anthropic and a fear that Anthropic, if it has access to the Pentagon's wartime infrastructure, can meddle with the AI models, can put limitations on its technology, can create changes to the AI that's been deployed that will negatively affect US national security.

[Luke Vargas]

Israel, Kuwait, Bahrain and Saudi Arabia have been hit by a barrage of missiles this morning as Iran launched fresh attacks. That comes after President Trump said the US Military would stop strikes on Iranian power plants for five days following what he called productive talks with Tehran. Iran has denied that talks were taking place, according to state media, but acknowledged that countries in the region were trying to get diplomacy going. At the same time, Journal Middle east editor Andrew Dowell says that Gulf countries are weighing whether to get more involved in the fighting.

[Andrew Dowell]

The Gulf's a little bit of two minds here. They've obviously been hurt very badly by the war and they don't want it to continue. By the same token, they don't want it to end where Iran is in, for lack of a better phrase, a position of power, certainly where Iran has more influence over the crucial Strait of Hormuz waterway than it had coming into the war. So in the background, the Gulf is pressing the US Very hard to keep going and finish the job so that Iran doesn't come out of this still able to pose a threat. On the other hand, they are participating in the process with talks to make sure that they head in the right direction and also just because they do eventually want an end to the war. And obviously diplomacy will have to be a part of that.

[Luke Vargas]

President Trump promised earlier this month that once Iran's nuclear threat was taken out, prices would drop rapidly. But how likely is that now as banks raise their medium term oil price forecasts and energy producers warn that it could take years to rebuild following Iranian attacks. Jorge Leon is the head of geopolitical analysis at Rystad Energy. Jorge, it's a new week, but here we are once again focusing on Iran holding up traffic through the Strait of Hormuz, despite the country now having been hit thousands of times by the US And Israel. Obviously we saw how markets were very quick to price price in a short term disruption of Hormuz traffic. But did anyone really factor in that Iran might possess an enduring asymmetric advantage here?

[Jorge Leon]

I think, indeed, I think no one was really anticipating that this was going to be a longer conflict. It's Iranians only card on the table to close the Strait of Hormuz. At the end of the day, it all goes back to the leverage, to Iranian leverage. They hold the Strait of Hormuz and also putting pressure on the US And a way of doing that is through attacks in energy infrastructure that would hurt the US Economy through a high oil price. So I think that everybody in the market was anticipating that this was going to be part of the problem. But everybody in the market, I think, anticipated that this was going to be top priority for the US and governments around the world to try to reopen as fast as possible. Now, in reality, what we have seen is that it's not that simple to reopen this trade of Hormuz.

[Luke Vargas]

I wonder, are we starting to look at a situation now where even if it is reopened, that supply could remain disrupted for quite some time?

[Jorge Leon]

I think that the markets can reopen faster than supply chain. I think that is key. Yes. If the Strait of Hormuz reopens tomorrow, we shouldn't expect that supply will come back to the market very rapidly for a few reasons. The first one is that there has been supply production shut ins and it takes time for that production to go back to the market. You've actually taken out the pressure from the well wells and pressure in the reservoir is fundamental to determine how much oil you can get. So it does take quite a bit of time. Then you also have the fact that you have massive logistical backlog in the Strait of Hormuz. So even if it reopens tomorrow, just clearing up all those vessels that are waiting There will take quite a bit of time. And then finally the fact that energy infrastructure has been hit. We've seen refineries being hit, we've seen pipelines being hit. We've also seen oil storage capacity being taken offline. So to give you a sense, before the conflict refinery runs in the Middle east were around 26 million barrels per day. Right now we think the refinery runs is close to 16 million barrels per day. So that means that roughly 10 million barrels per day of refinery runs have been hit because of the damage to infrastructure. So that's it really shows how important those attacks have been.

[Luke Vargas]

Kind of an insult to injury in all of this is that the big oil companies had spent recent years sort of doubling down on the Middle east and an existing partnerships and investments they had there as opposed to pursuing new ventures elsewhere. All of that sort of suggesting that if there is going to be a push now to hedge against the Middle east, that's going to take a while and be pretty costly. Is that fair?

[Jorge Leon]

I think that's very fair. I mean, yes, we can get a little bit more barrels from Venezuela, maybe 200,000 barrels per day more towards the end of the year. Yes, shale producers in the US could ramp up a little bit production, let's say 300,000 barrels per day and a little bit here and there. But we're talking about a supply disruption of 10 million barrels per day. So you could get probably half a million barrels per day of extra supply by the end of the year.

[Luke Vargas]

That's going to increase the pressure on the White House, on Europe to ease up on sanctions on Russian oil, is it not? If this continues.

[Jorge Leon]

For sure, for sure. You know, we've seen that the waivers were given to India to continue buying Russian crude at sea. We've seen that now waivers have been given for buying Iranian oil at sea. So I think that governments around the world are trying to find different levers to try to limit the upside price pressure and protect consumers around the world. We've seen some measures from certain governments, particularly in Asia, to try to protect final consumers. New policies such as remote working car sharing, public transport and so on. But those are measures that I would anticipate that if this conflict continues in the next few weeks that governments will continue to put into place.

[Luke Vargas]

If they do, you'll hear about it here. Jorge Leon is the head of geopolitical analysis at Rystad Energy. Jorge, thanks as always. Appreciate you, thanks. Coming up, the day's markets news including a new EU Australia trade deal and a potential beauty tie up that's after the break.

[Stassi Schroeder]

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[Luke Vargas]

The European Union and Australia have inked a new free trade deal and Security Partnership Journal reporter James Glynn is in Sydney.

[James Glynn]

The agreement comes after an arduous eight year process that stalled a number of times and it feels as if it was sped up in the end by the extreme level of uncertainty that most countries are facing at the moment with the on and off again tariffs of the White House. European Commission President Ursula von der Leyen was very explicit in what was motivating her to get this done and it really goes to the requirement for greater certainty around security agreements and curing things like critical metals, which Australia is a big exporter of. For Australia it means an extra 8 to 10 billion dollars in trade, which is not insignificant, but I think the agreement really should be viewed as part of the middle powers to larger powers reaching out to each other at a time of great uncertainty.

[Luke Vargas]

The deal is the EU's latest as it diversifies economic relations away from the US following agreements with India, Indonesia and four South American countries over the last year. Elsewhere in markets news today, Estee Lauder is in talks to buy Spanish beauty group Pooch Brands, a deal which both said could still fall apart would create a global beauty giant and expand Estee Lauder's already sprawling portfolio to include cult brands such as Charlotte, Tilbury and Byredo. Tesla has notched its first monthly sales increase in Europe in more than a year as double digit growth in the continent's battery EV market boosted a number of carmakers and and Europe's most valuable fintech company, Revolut, has posted a 46% jump in revenue, with its customer base growing by around a third over the past year. The London based company, whose app lets users make payments, trade assets and hold money, got regulatory approval to operate as a full fledged bank in the UK this month and recently applied for a national bank charter in the US and that's it for what's news for this Tuesday morning. Today's show was produced by Daniel Bach and Hattie Moyer. Our supervising producer is Sandra Kilhoff. And I'm Luke Vargas for the Wall Street Journal. We'll be back tonight with a new show, and until then, thanks for listening.

[Narrator]

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