(NewsNation) — Houthi rebels have been launching attacks on commercial cargo ships in the Red Sea, causing some companies to take alternate routes that could affect Americans at the gas pump.
British Petroleum was the latest company to change its route to avoid the Red Sea, which caused the cost of oil shipments to rise.
The price of Brent crude, the international oil standard, has risen 8% since Dec. 12 to $79 a barrel, as BP and other companies’ ships take longer, more expensive routes around Africa to avoid the Suez Canal.
Peter Schiff, chief economist for Euro Pacific Asset Management, said Wednesday on “CUOMO” in an environment where “you hadn’t had the government creating so much inflation,” the increase in prices would be offset by a decrease in others.
“Inflation is not caused by rising prices … it’s the expansion of the money supply. The government has been pursuing inflation as a policy goal for more than a decade,” Schiff said. “This is just the tip of a huge iceberg.”
The United States and other nations have launched a coalition to counter attack on commercial ships, an effort that Schiff believes may contribute to even higher prices.
“Any coalition we lead, we’re going to have to borrow even more money of finance it, and that means the Fed(eral Reserve) is going to print more money to buy those bonds,” Schiff said. “All of this is inflationary.”
However, there are other factors that could keep the price of oil from jumping significantly higher.
The New York Times notes that oil prices were on a downward trend before the shipping reroutes, and the Houthis may be unlikely to target ships connected to countries they view as friendly, such as Russia and Qatar.
In addition, the United States is producing more oil than it ever has before. In the week of Dec. 15, the output was 13,300 barrels per day, according to the U.S. Energy Information Administration.
NewsNation correspondent Kellie Meyer contributed to this report.