Trump administration on inflation alert amid Iran war… “Reviewing every option”

As the U.S.-Iran war sent global oil prices surging, the Donald Trump administration has moved to rein in inflation.

According to Politico on the 5th (local time), White House Chief of Staff Susie Wiles recently instructed aides to bring forward ideas to lower gasoline prices. An energy industry executive told the outlet that “the White House is reviewing every possibility to find ways to bring down energy prices, particularly gasoline.”

Interior Secretary Doug Burgum, who also chairs the National Energy Council, said in an interview with Bloomberg News that the administration is considering all possible measures to respond to the spike in oil prices. “There is an opportunity for the federal government to step in and normalize the situation to some extent,” he said, adding, “The United States can take on some risk to ensure stable supplies for allies around the world—and the U.S. is the only country that can do that.”

The White House is also said to be weighing steps such as a temporary suspension of the federal gasoline tax. Other options being discussed include releasing crude from the Strategic Petroleum Reserve, coordinating with other countries, waiving fuel blending mandates, and even the Treasury engaging in crude oil futures trading. Bloomberg assessed that “it would be unprecedented for the United States—the world’s largest oil producer and consumer—to intervene in the oil market.”

The Trump administration is moving quickly with an eye on the November midterm elections. Trump secured voter support during the last presidential campaign by criticizing former President Joe Biden for allowing inflation to surge, and since the start of his second term he has highlighted falling oil prices as a key achievement—meaning rising oil prices could undermine that record.

According to the American Automobile Association, the nationwide average retail gasoline price stood at $3.25 per gallon as of that day, up 9% from the previous week. A weekly increase of that magnitude is the first since March 2022, when Russia invaded Ukraine.

Bloomberg Economics estimated that if energy facilities in the Middle East are damaged and a closure of the Strait of Hormuz is prolonged, global oil prices could jump to $108 a barrel. It also projected that if such conditions persist through year-end, U.S. inflation could rise by up to about 0.8% points.

In an interview with Reuters that day, Trump said he is “not worried at all” about rising gasoline prices and that “once the war ends, prices will fall very quickly.” However, he appears to be weighing stabilization measures as well—having said via social media on the 3rd that the U.S. Navy would escort tankers passing through the Strait of Hormuz, and directing the U.S. International Development Finance Corporation (DFC) to provide insurance and guarantees at reasonable prices for shipping, including energy transport vessels transiting the Gulf region.

Reporter Han Kyung-je