Oil Prices Approach US$120 as Trump Administration Faces Iran Conflict Fallout
The Trump administration has begun showing signs of panic as global crude oil prices have surged. Although initially predicting the price increase would be short-lived, the scale and persistence of market reaction to the conflict with Iran has exceeded White House expectations.
Within just one week of the conflict’s outbreak, global oil prices briefly touched US$120 per barrel, the highest level since Russia’s invasion of Ukraine in 2022. Domestically in the United States, average petrol prices climbed as much as 51 cents per gallon in the past week alone.
This situation has placed President Trump in a difficult position. His military ambitions abroad now threaten the domestic economic achievements he has previously championed. Senior energy analyst Neil Atkinson warned that price pressures would persist. “It is difficult to see anything other than sustained upward price pressure. People will suffer at the petrol pump,” he stated.
The paralysis of traffic through the Strait of Hormuz has emerged as the primary trigger. This critical sea lane off the Lebanese coast normally carries approximately 20% of global oil supplies, but is now completely blocked. Shipping companies are reluctant to risk Iranian retaliation following attacks by the United States and Israel.
Senior US officials, including Energy Secretary Chris Wright and Treasury Secretary Scott Bessent, spent the weekend developing emergency measures. Options under consideration range from relaxing domestic production regulations, restricting exports, to direct intervention in oil futures markets.
Nevertheless, Trump has publicly sought to minimise the impact of the crisis. Through Truth Social, he described the rise in petrol prices as “a very small price to pay” and added, “ONLY STUPID PEOPLE WOULD THINK OTHERWISE!”
In line with the president, White House spokesperson Taylor Rogers stated the price surge was temporary. “This represents a short-term shift in oil prices, which will decline sharply once the objectives of Operation Epic Fury are achieved,” she asserted.
Behind the scenes, officials have begun considering the use of the Strategic Petroleum Reserve (SPR), despite Trump previously criticising Joe Biden for doing so. However, experts believe that releasing strategic oil reserves would be insufficient to offset the loss of 20 million barrels of oil per day from the Strait of Hormuz.
The only solution deemed effective by oil executives and diplomats is military escort of tanker ships through the Strait of Hormuz. In his interview with CBS News on Monday, Trump gave strong signals regarding this step. He stated that his administration was “considering” taking full control of the strait to stabilise global markets.