The Trump administration has taken several measures to soften the blow of Iran-driven oil price increases, and yet prices remain stubbornly high.
As the war progresses, it is becoming clear that there is not much the US or any other government can do to provide relief from high oil prices other than ending the conflict.
Military success would be required to increase oil flows and lower energy prices. That means this episode is a far cry from previous market crises that President Donald Trump presided over. The pattern of rising political tensions followed by rapid economic relief during Trump’s second presidency may finally be broken.
This is a problem that Trump cannot solve through economic policy.
Economic mathematics is uncompromising. The war will cut global oil supply by about 8 million barrels per day in March international energy agency Estimated Thursday. This is due to the near closure of the Strait of Hormuz, the narrow waterway bordering Iran, which in normal times carries up to 20 million barrels a day, as well as efforts by the oil industry to deal with the problem and increased production elsewhere.
The Trump administration and other governments are trying to bring more oil to the market, primarily by releasing about 400 million barrels from the strategic reserve. But it will not come immediately. Based on U.S. plans, the U.S. share will amount to about 1.4 million barrels per day in about four months. Department of Energy. All told, global releases will probably amount to 3 million barrels per day, according to estimates shared with clients by Goldman Sachs.
These figures are rough estimates made quickly during the war and should be taken seriously. But the overall result is clear: Government reserves probably cannot meet even half the daily shortfall caused by the war.
Many other schemes of the administration are also going on. Treasury Secretary Scott Besant said Thursday the administration will ease some sanctions on Russian oil. The US International Development Finance Corporation is working on a plan for backstop insurance for ships in the region.
Despite those measures, oil prices rose on Friday. The price of a gallon of regular is $0.69 higher on Friday than a month ago, according to aaa. This is an increase of 23%. The price of a barrel of oil in the US market in mid-February will be around $63. It was $97 on Friday afternoon.
The White House is well aware of the concerns of Americans. The President has said the short-term cost of higher prices is necessary to eliminate the threat of the Iranian nuclear program.
On March 11, 2026, the Thailand-flagged cargo ship Mayuri Nari sank in black smoke in the Strait of Hormuz.
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“We expect these prices to come back down significantly after the war is over,” a White House official told CNBC, speaking on condition of anonymity to discuss the administration’s strategy.
While Trump and Defense Secretary Pete Hegseth have been predicting a short war since it began nearly two weeks ago, they have changed the ultimate goal, naming nuclear concerns along with removal of the Iranian regime and security for commerce in the region.
Before the war the oil market was well supplied. “Any evidence that the decline could continue is highly speculative,” the official said.
Still, it is unusual for this president to come to power through economic disruption. Trump generally listens closely to the markets. The most famous episode was last April, when sticker shock over the size of his tariff program sent stocks plunging and the Treasury market nearly crashed. The administration supported its most extreme plans. The market learned a lesson embodied in the derisive acronym TACO: Trump Always Chickens Out.
It was never really true that Trump would lose his patience. Instead, he will take big risks for uncertain gains and make changes in policy and rhetoric when the risks become real.
But in Iran, Trump can’t pivot that way, because the driver of prices is not economic policy that can be easily changed.
Iran is a military problem. “The only thing restricting transit in the strait is Iran firing on shipping,” Defense Secretary Pete Hegseth said at a briefing Friday.
America wants the Strait of Hormuz to remain open. Iran does not. And 13 days into the war, despite the incredible firepower the US and Israel are unleashing on Iran, it is unclear when the situation might change.
Energy Secretary Christopher Wright told CNBC on Thursday that the US Navy may be able to move tankers through the strait, but at the most it could begin by the end of the month. Without military assistance, the ship’s captains are unlikely to budge, even if the U.S. government helps them find more insurance. Even then oil traffic may not appear normal.
The growing war effort has uneasy echoes of the Iraq War. The thousands of American troops on the ground were not enough to end the violence and the conflict lasted for nearly nine years.
No one in power is talking openly about sending troops to Iran, he said. And the US and global economies may be able to deal with an Iran war even if oil prices remain high. The US economic expansion started after Covid to avoid oil reaching $120 per barrel in 2020 when Russia invaded Ukraine in 2022. As recently as the fall of 2023, gas prices were higher than they are now.
Meanwhile, the US military remains the most powerful in the world. Tehran has prepared for this moment, but so has the Pentagon. Other governments also want the Strait of Hormuz to remain open. Iran cannot possibly survive forever.
But unless Iran capitulates or the US military takes over, markets and the economy will remain weak.