Trump administration officials are bracing for the possibility that oil prices will climb above $150 a barrel as the Iran war continues, multiple sources told Politico.
The White House is looking at ways they can bring down costs, including deploying additional emergency powers, two industry officials said. Administration officials have not ruled out oil going as high as $200 a barrel.
White House officials are in an "all hands on deck" mode to prevent oil prices from spiking.
Stephen Moore, a former economic adviser to President Donald Trump, told Politico a lot would have to go wrong for oil to hit $150 a barrel, calling it a "nightmare scenario."
"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," Moore said. "It's no big shocker that the president is now really focused on getting that down as quickly as possible."
Trump administration officials are doing everything they can to keep gas prices down.
"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," an industry official told Politico.
The White House denied it was weighing the possibility of oil spiking to $200 a barrel.
"The Administration continues to explore additional options it can take as needed to further mitigate any short-term supply disruptions," White House spokesperson Taylor Rogers said.
"Thanks to President Trump, America enjoys record-high domestic oil and gas production."
Top staffers at the Energy Department have canceled trips so they can remain in Washington as the war continues and gas prices increase, a department official told Politico.
"The politicals are pretty absorbed by it all," the official said about the effect of the war in Iran.
Experts warn the real damage of the war has yet to be felt, since there was a stockpile of oil that was headed to markets before the war began. With Iran blocking the Strait of Hormuz, the impact is expected to be felt in the U.S. in two weeks, Rory Johnston, an oil analyst, told Politico.
"This is going to be really hard on consumers," Johnston said.
"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."
Sam Barron ✉
Sam Barron has almost two decades of experience covering a wide range of topics including politics, crime and business.
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