Advisors to US President Donald Trump have warned that the war with Iran could last longer than expected if Tehran succeeds in disrupting oil flows through the Strait of Hormuz and driving global energy prices higher.
As per officials, the risk to the crucial energy shipping route has become a major concern inside the White House in the military campaign, codenamed ‘Operation Epic Fury’, which aims to dismantle Iran’s nuclear programme, ballistic missile capabilities, naval forces and regional proxy networks.
“The Iranians f****** around with the Strait makes him more dug in,” a senior administration official told Axios.
While Trump has publicly shown great confidence about the military progress of the operation, advisors to Trump have noted that he has been heavily focused on the economic impact of the war on the oil market.
“The president sees the briefings. He sees the numbers. And he feels good about his decision, militarily,” one advisor said. “Oil is another matter. There’s plenty of oil. It’s just getting it on the market that’s the thing.”
On Wednesday, the administration coordinated what officials described as the largest emergency oil reserve release in history – 400 million barrels globally, including 172 million barrels from the US Strategic Petroleum Reserve.
Washington has also been discussing naval escorts for tankers passing through the Strait of Hormuz and providing insurance cover for vessels travelling through the narrow and increasingly volatile waterway.
The urgency of the matter further increased after two oil tankers were attacked in the Persian Gulf on Wednesday evening, with images circulating online showing a large fire at sea.
Despite the reserve release, oil prices continue to remain volatile, with the rates climbing above $100 per barrel on Wednesday after briefly surging as high as $120 earlier in the week.
Iran has warned that if the conflict continues and energy infrastructure is targeted, prices could rise to $200 per barrel – a level analysts say could push petrol prices in the US to cost around $5 per gallon.
The Strait controls the flow of over one-fifth of the global oil trade, meaning prolonged disruption would affect economies far beyond West Asia, including having ripples in the energy markets of Asian economic powerhouses China and India, which are two of the biggest buyers of oil coming from the waterway, accounting for nearly 70% of the oil purchases from the Strait.
Officials say Tehran’s pressure on energy markets appears designed to increase international pressure on Washington and Israel to halt the bombing campaign that began on February 28.
So far, Iranian strikes on Gulf targets have pushed many regional governments closer to Washington. A United Nations resolution condemning Iran’s retaliatory attacks this week was supported by 135 countries.
Domestically, however, the conflict remains politically sensitive. Trump’s approval ratings remain low, and rising petrol prices risk becoming a major political issue.
Presidential advisors noted that Trump expects energy prices to fall once the conflict ends and believes the public will ultimately view the operation as justified.
“He genuinely believes gas prices will fall substantially when this is over — and long enough before the midterms where it will not be a problem,” one advisor said.
A confidant who recently spoke with Trump said the president was not actively seeking an exit strategy but was getting wary of the prolonged conflict, looking to end the war as quickly as possible.
“I wouldn’t say he’s looking for an exit strategy,” the person said. “But he doesn’t want this to last longer than it needs to.”
