NEED TO KNOW

• Trump officials preparing for oil prices to potentially reach $150 per barrel
• Gas prices hit $4.06 nationally, up from $2.98 before war began
• Administration in “all hands on deck” mode exploring emergency powers to address supply disruption

WASHINGTON (TDR) — Trump administration officials are preparing for the possibility that oil prices could climb above $150 per barrel as the war with Iran continues, entering what one industry observer called “all hands on deck” mode to prevent economic fallout.

The big picture: The White House is confronting the gap between its early predictions of a quick victory and the reality of a monthlong conflict that has disrupted global energy markets, with Treasury officials now seeing $100 per barrel as a “baseline” and not ruling out spikes to $200.

• Stephen Moore, former Trump economic adviser, called $150 oil a “nightmare scenario” that would seriously damage the economy
• The National Energy Dominance Council—including Defense, Energy, Commerce, State and Interior departments—is coordinating the administration’s response
• Eurasia Group estimates a 55 percent chance the war continues through May with oil above $150

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Why it matters: Sustained high oil prices would function as a “massive tax” on consumers, hitting lower-income households hardest while potentially triggering broader economic slowdown and inflation.

• Oil analyst Rory Johnston — “This is going to be effectively a massive tax that will sap excess disposable income. It will hit poor households in a much larger way”
• Diesel prices have pushed past $5 a gallon, threatening knock-on effects for groceries, shipping, and construction
• Jet fuel prices have surged 85 percent since late February, driving airfares to $465—a record for this period

Driving the news: The administration is exploring emergency measures as the Strait of Hormuz remains largely closed and global supply buffers begin to exhaust.

• Industry official — “They’re trying to come up with every conceivable idea that might alleviate energy prices, including the exercise of emergency powers and authorities and national defense reasons to address the supply chain disruption in the Strait of Hormuz”
• Top Energy Department officials have canceled trips to remain in Washington monitoring the situation
• Former Secretary of State John Kerry noted that “ships that escaped the Strait of Hormuz before [the war] began have reached port. They’re empty now”

What they’re saying: The administration maintains it is managing the crisis effectively, while critics question whether early predictions of a short war created false expectations.

• White House spokesperson Taylor Rogers — “The Administration continues to explore additional options it can take as needed to further mitigate any short-term supply disruptions. Thanks to President Trump, America enjoys record-high domestic oil and gas production”
• Stephen Moore — “All the economics team over there that I’ve talked to, they’re all aware of the negative effects of rising oil and gas prices. It’s no big shocker that the president is now really focused on getting that down as quickly as possible”
• Jason Bordoff, Columbia University Center on Global Energy Policy — “There is no policy option to prevent oil prices from marching up toward $200 a barrel if the Strait of Hormuz remains closed”

Yes, but: The U.S. is better positioned than most countries to weather the supply shock due to domestic production capacity, and some analysts believe the market has already priced in worst-case scenarios.

• The U.S. role as a leading oil and gas producer provides insulation unavailable to import-dependent nations
• Markets rallied Monday on signals the U.S. might withdraw from Hormuz efforts, suggesting investors see de-escalation as more likely than prolonged conflict
• White House press secretary Karoline Leavitt has stated that once the war ends, gas prices “will plummet back to the multiyear lows” American drivers enjoyed before the conflict

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Between the lines: The administration’s planning for $150 oil suggests private assessments differ significantly from public messaging that the war would end quickly with minimal economic disruption—raising questions about whether the White House adequately prepared for the conflict’s consequences.

• Trump and officials repeatedly stated the conflict would last only a few weeks with prices dropping immediately after
• The president’s approval rating has fallen to –16.7, a record low for his second term, according to Nate Silver’s analysis
• The “air pocket” in oil markets—created by ships that left Hormuz before the war—is expected to hit the U.S. in about two weeks, potentially driving prices higher regardless of diplomatic developments

What’s next:

• The administration will continue exploring emergency powers as the April 6 deadline Trump imposed for Iran to reopen Hormuz approaches
• Congressional Democrats are preparing economic relief proposals as households face mounting energy costs
• European and Asian allies are meeting to discuss coordinated responses to the supply crisis

If the administration’s private planning assumes $150 oil while its public messaging promises rapid price relief, which assessment should guide policy—and what does that gap reveal about the trade-offs between military objectives and economic stability?

Sources

This report was compiled using information from Politico, E&E News, AOL, Fortune, and The New York Times.

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