The Trump administration has started to panic about the spiking price of oil.

While senior Trump aides had anticipated some brief surge in oil prices in the first days of the war with Iran, the size and sustainability of the market reaction caught them off guard, people familiar with the internal discussions told CNN.

Now, as oil prices hover near $100 a barrel just over a week into the war and US gas prices are moving sharply higher, it’s prompted a belated rush to try to reassure investors and seek ways to tamp down the impact. But the administration is confronting the limits of its power — and the reality that President Donald Trump’s decision to wage war abroad threatens to wipe out some of his key economic accomplishments at home.

“It’s hard to see anything but continued upward pressure on prices,” said Neil Atkinson, a longtime energy analyst and former head of the International Energy Agency’s oil industry and markets division. “People will get hurt at the pump.”

Officials spent the weekend and Monday urgently drawing up a wider array of options aimed at calming financial markets and limiting the impact of oil’s surge on US gas prices, the people familiar said. Those ideas have ranged from more limited regulatory actions, such as easing restrictions on the flow of domestic oil, to far more extreme steps like directly intervening in the global oil trade. Trump aides were expected to present a slate of options to the president as soon as Monday, according to the people familiar.

For now, shipping traffic through the Strait of Hormuz remains at an effective standstill, disrupting roughly 20% of the world’s oil supply with little sign of when tankers will again be able to safely traverse the critical waterway off the coast of Iran.

Few shipping firms have been willing to risk the threat of Iran firing on their tankers since the US and Israel bombed Iran more than a week ago, creating a backlog that’s driven up global oil prices at a historic pace.

Oil prices early Monday neared $120 a barrel before backing off somewhat, a level not seen since the early stages of Russia’s war against Ukraine in 2022. That run-up has swiftly rippled through to gas prices in the US, spurring a 51-cent-per-gallon jump in the national average over the last week.

The spike has prompted alarm throughout the Trump administration, where officials had originally planned to make lower gas prices a key pillar of the GOP’s efforts to hold onto their majorities in November’s midterm elections.

That level of urgency picked up markedly over the weekend, the people said, as the price of oil hit $100 a barrel and it became clear that the administration’s initial steps had largely failed to allay fears of a prolonged energy crisis.

Energy Secretary Chris Wright, Treasury Secretary Scott Bessent and Interior Secretary Doug Burgum have taken the lead in developing a slate of new options, alongside staffers on the White House’s National Energy Dominance Council.

Wright and other officials have sought to downplay the concern in public appearances over the last several days, blaming oil traders for irrationally bidding up prices and insisting that traffic through the Strait of Hormuz would soon resume as normal.

“We are not too long away, I think, before you’ll see more regular resumption of ship traffic,” Wright said Sunday on CNN. “This is a weeks, this is not a months, thing.”

Trump in recent days has also dismissed the war’s impact on gas prices, writing Sunday on Truth Social that it’s a “very small price to pay” and that “ONLY FOOLS WOULD THINK DIFFERENTLY!”

In a statement, White House spokeswoman Taylor Rogers called the surge “a short-term change in oil prices, which will drop dramatically once the objectives of Operation Epic Fury are achieved.”

President Trump and his entire energy team have had a strong game plan to keep the energy markets stable well before Operation Epic Fury began, and they will continue to review all credible options,” she said.

But behind the scenes, officials have frantically sought ways to ease a crisis they worry will damage Trump with voters already anxious over the cost of living and has the acute potential to ripple across the wider US economy. They’ve also pressed oil industry representatives for ways to accelerate production, though there’s little inclination among companies to produce significantly more oil without any clear sense of how long the high prices will last.

Aides have explored a range of potential administrative levers, including easing Jones Act restrictions to boost the flow of domestic oil around the country and loosening other regulations that might slow the rise in gas prices.

They have also weighed more aggressive steps, including new restrictions on US exports, the possibility of imposing price controls and even having Treasury intervene directly in oil futures markets to put downward pressure on prices, the people familiar said.

And Trump officials have now broached the potential for deploying the US’ strategic petroleum reserve, after days of firmly ruling it out as an option. But there is still deep aversion to using the SPR, which the Biden administration leaned on to ease oil prices in 2022 — to only marginal success.

Trump has repeatedly criticized former President Joe Biden’s use of the reserve, accusing him of depleting it for political purposes.

On Monday, the Group of Seven nations discussed a coordinated release of their countries’ reserves in a bid to address the supply crunch. But the US was among those skeptical of that step, one of the people familiar said, and the group opted against any immediate action.

The White House deferred a request for comment to a joint G7 statement that the nations “stand ready” to release their stockpiles if necessary.

The remaining options under discussion within the administration could have some marginal benefit for the oil markets and US gas prices, energy experts said. Yet they’re unlikely to shift the trajectory and would do little to make up the loss of as many as 20 million barrels of oil a day that typically transits the Strait of Hormuz.

Already, one initiative that Trump officials were optimistic might shift the dynamics — offering up to $20 billion in insurance for tankers willing to cross the waterway — has fallen flat.

“Even if you’re insured against the risk of your ship being sunk, you don’t want your ship to be sunk,” said Tobin Marcus, the head of US policy and politics at financial research firm Wolfe Research. “They’re not bad ideas, but they’re not enabling people to ignore the fact that the Strait has had nothing go through it for six days.”

Trump officials in recent days have also floated the potential for military escorts through the Strait. But it remains unclear how quickly the US will be able to organize those escorts. And in the meantime, it’s only further reinforced that the only certain way to stabilize the oil markets is to bring an end to the war — and do it fast enough to avert lasting economic consequences.

Still, it remains unclear how quickly the US will be able to organize those escorts. And Trump himself said in an interview with CBS News on Monday that his administration is “thinking” of taking over the Strait.

In the meantime, the idea has further reinforced that the only certain way to stabilize the oil markets is to bring an end to the war — and do it fast enough to avert lasting economic consequences.

“The other options that the administration has, other than ending the war, are actually pretty limited,” Atkinson said. “The oil market is massively short of supply.” (CNN)

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