Trump administration starts to panic over rapidly rising oil costs

The Trump administration has started to panic as oil prices have spiked in the week since the war with Iran began, CNN reports.

“The Trump administration has started to panic about the spiking price of oil”

CNN

Officials had anticipated a brief surge but were caught off guard by the size and sustainability of the market reaction.

CNN

Oil prices hovered near $100 a barrel just over a week into the war and early Monday neared $120 before backing off.

Shipping traffic through the Strait of Hormuz is at an effective standstill, the article says.

That standstill has disrupted roughly 20% of the world’s oil supply as few firms risk tankers after the US and Israel bombed Iran more than a week ago, the article says.

That backlog has driven US gas prices up, with the national average rising 51 cents per gallon over the last week.

Privately, senior aides and agency leaders rushed to draw up a wider array of options to calm markets and limit the impact on US gas prices.

Energy Secretary Chris Wright, Treasury Secretary Scott Bessent and Interior Secretary Doug Burgum, alongside staffers on the White House’s National Energy Dominance Council, led the effort to present options to President Donald Trump, according to people familiar with the discussions.

CNN

Ideas under consideration range from regulatory steps to ease the flow of domestic oil and easing Jones Act restrictions to loosening other regulations.

More interventionist measures discussed include new limits on US exports, price controls, Treasury intervention in oil futures markets and deploying the strategic petroleum reserve (SPR), which officials had previously ruled out but have now broached.

An offer of up to $20 billion in insurance for tankers willing to cross the Strait failed to entice carriers.

“The Trump administration has started to panic about the spiking price of oil”

CNN

Proposed military escorts through the Strait remain uncertain in timing.

The Group of Seven discussed a coordinated release of stockpiles, but the article says the US was skeptical and the group opted against immediate action while issuing a joint statement that they "stand ready" to release reserves if necessary.

Officials and analysts quoted in the article warned these measures would likely provide only marginal benefit and would not make up the loss of as many as 20 million barrels a day that typically transit the Strait of Hormuz.

The article portrays a White House caught between public downplaying and private urgency.

Wright publicly blamed traders for irrational bidding and said ship traffic resumption would be a matter of weeks.

CNN

President Trump dismissed the war’s impact on gas prices on Truth Social as a "very small price to pay" and wrote "ONLY FOOLS WOULD THINK DIFFERENTLY!"

White House spokeswoman Taylor Rogers called the surge "a short-term change in oil prices, which will drop dramatically once the objectives of Operation Epic Fury are achieved."

This creates a contradiction between official downplaying and experts' warnings about continued upward pressure on prices.

Experts cited in the story, including Neil Atkinson and Tobin Marcus, warned that continued upward pressure on prices is likely.

They said that, short of ending the war quickly, the administration’s other options are limited.