High oil prices will hit US consumers faster and much harder than those in the UK. In Britain, high levels of taxation mean oil prices make up only around 30pc of the cost to drivers at the pump. In the US, where taxes are much lower, oil prices make up the bulk of fuel costs.
“In the US, a 10pc jump in oil prices is a 10pc jump in gasoline prices. It is much more visible, much more hurtful,” says Mr Schieldrop.
“Also, more Americans live from hand to mouth, on the margin. If they suddenly have an additional outlay for gasoline, they are extremely hurt. And you cannot take the bus there, you have to use your car. It will be negative for Harris.”
Republicans will seize on any rise in oil prices as proof that the Democrats cannot be trusted on the economy or foreign policy, adds Mr Schieldrop.
Shortly before Iran launched its missiles at Israel, US shale magnate and prominent Republican donor Harold Hamm told the Financial Times that the Biden administration had left the US “unusually vulnerable” to an oil price shock from the Middle East. Mr Hamm blamed Joe Biden’s decision to release oil from the US strategic petroleum reserve.
And the US is unlikely to hold much sway on Israel’s next steps in the conflict. “Israel is not listening to the US whatsoever,” says Mr Schieldrop. “Maybe Netanyahu thinks that Donald Trump is a stronger supporter of him and he won’t mind high oil prices hurting Kamala Harris in the run-up to the US election. It is going ahead and doing whatever it wants.”
In turn, the prospect of further escalation is rising. Israel has effectively neutralised Hezbollah in Lebanon and Hamas in Gaza, and Iran looks weak, crippled by more than a decade of sanctions. Oil analysts are relatively sanguine for now, but the geopolitical situation is a wild card.
Iran exports 1.56m barrels of oil per day, primarily to China. This is only 1pc to 2pc of global demand and could easily be covered by the Opec oil cartel’s 6m barrels per day in reserve capacity.
But if the conflict escalates, markets will start to fear a much bigger problem, which is Iran’s capacity to block the Strait of Hormuz, a critical shipping route in the Middle East, says Mr Schieldrop.
“If all of Iran’s export capacity was damaged and they couldn’t export, why would they stand back from blocking the Strait of Hormuz, why should everyone else have oil income? That would be a worst-case scenario, but then the oil price would go ballistic,” he says.
Around 20pc to 30pc of global supply is shipped through the narrow strait at the edge of the Persian Gulf between Iran and Oman. If Hormuz was blocked, oil prices could hit $200 per barrel, says Mr Schieldrop.