'I'm watching': Trump warns against oil price increases

President Trump warned oil-producing nations on Monday to keep prices down and ordered his team to increase domestic production immediately, as the world braced for possible retaliation from Iran over the U.S. bombing of its nuclear sites.

Iran could decide to choke off the Strait of Hormuz to the south of its country, a channel through which a quarter of the world’s oil supply moves. It could lay mines in the strait, sparking an increase in oil costs.

“Everyone, keep oil prices down. I’m watching! You’re playing right into the hands of the enemy. Don’t do it!” Mr. Trump posted in all caps on Truth Social.

At the same time, he ordered the Department of Energy to “DRILL BABY DRILL!!!”

“And I mean NOW!!!” Mr. Trump said.

The president campaigned last year on a promise to tap into U.S. oil fields and bring energy costs down. He said once that happened, inflation in general would come down as companies saved money along the supply chain.

Mr. Trump on Saturday ordered the bombing of three nuclear sites in Iran, an oil-rich nation, hoping to end a conflict with Israel and take the Islamic Republic’s nuclear capabilities off the table in the region.

So far, oil prices haven’t seen widespread shocks, as investors hope for a gradual de-escalation in the conflict.

Kevin Hassett, director of the White House National Economic Council, told CNBC that he hasn’t seen much disruption in the oil markets.

Other oil-producing countries have significant reserves, providing Mr. Trump “room to adjust” if Iran’s retaliation causes price hikes, Mr. Hassett said.

Wall Street traders are shrugging off the conflict for now, with stocks rising Monday to start the trading week.

The Dow Jones Industrial Average rose 200 points upon opening, and other major indexes also were in positive territory.