Crude Prices Make Record Jump As Trump’s Measures Fail To Calm Markets

A week after it began its strikes on Iran, the Trump administration’s efforts to stem the rise in energy prices have yet to turn the tide — and analysts warn the worst of the price shocks may still be to come.

The U.S. benchmark oil price eclipsed $90 a barrel on Friday for the first time since 2023, up more than $20 since the war began Saturday and the market's highest one-week jump in history. The price increase has already started to appear for American consumers, with prices at the gas pump up 32 cents a gallon from a week ago.

The unyielding price increases — which analysts attributed to the continued disruption in the Strait of Hormuz, through which 20 percent of the world's crude passes each day — comes as President Donald Trump is under rising pressure to contain the economic impact of the war on Americans, eight months ahead of the midterms, where affordability issues are top of mind.

"Crude WILL go to $200 [a barrel], en route higher, unless traffic through the Strait resumes," said Rory Johnston, an oil analyst who writes the newsletter Commodity Context, in a post on X. "Not clickbait, but rather brutal physics and necessary economic incentives."

The White House has announced several measures aimed at calming the oil markets this week, including temporarily easing sanctions on India’s purchase of Russian oil and offering naval escorts and political risk insurance to oil and gas tankers traversing the Strait of Hormuz.

None of those measures has succeeded, however, as traders boost prices on news of disruptions to supply. Iran has succeeded in damaging several oil tankers, Iraq and Kuwait have already throttled oil production because their crude tankers can no longer get to market, and China has warned it could stop exporting fuel amid supply concerns.

The longer that ships avoid the Strait of Hormuz, Gulf countries will start to run out of storage capacity and be forced to shut in their production, said Claudio Galimberti, chief economist at research firm Rystad Energy.

“If the Strait of Hormuz remains closed for, let’s say, three weeks, then you will have shut in 15 million barrels a day of production in the Middle East,” Galimberti said at a Rystad conference in Washington on Thursday. “That takes us from a position of comfortable oversupply as of [last] Friday to one of incredible deficit, the size of which we’ve never seen.”

Galimberti noted that oil may be slow to flow even if shipping traffic resumes, given the difficult and expensive processes required to restart production. “If it's shut for weeks or months, then it's going to take weeks and probably months to bring it back to the same level,” he said.

Still, the administration has said it sees little cause for long-term alarm. Energy Secretary Chris Wright said Friday morning that Americans should expect gas prices to come down again soon.

“It’s weeks, I would say, in the worst case,” Wright told Fox News. “It’s weeks, not months.”

Wright acknowledged that prices are “more than we’d like them to be,” but noted they remain far lower than the record levels hit after Russia's invasion of Ukraine during the Biden administration, when global crude supplies were much tighter.

White House press secretary Karoline Leavitt said in a statement that record U.S. oil production, new supplies from Venezuela and efforts to reopen the Strait of Hormuz will keep a lid on prices.

“President Trump’s entire energy team, from the White House to the National Energy Dominance Council to Secretaries Wright and Bessent, have a game plan to keep oil prices stable throughout Operation Epic Fury,” Leavitt said.

Market analysts are painting a much more dire picture of the situation, however. Six days into the conflict, oil and gas tankers remain largely unwilling to transit the strait, cutting off a key supply route between major oil producers in the Gulf and their customers in Asia and beyond.

Even with the price increases this week, markets may not be pricing in the true impact of an extended closure of the strait, said Andon Pavlov, director of oil and tanker research at commodity tracking firm Kpler.

“There is a widespread expectation across the market that the alternative of not opening the Strait of Hormuz is just so apocalyptically bad that eventually something will happen,” he said in a Thursday webinar. “Is it going to happen? Every day makes it less and less likely.”

Even if the Trump administration can get the price of oil under control, that does not guarantee that the price of gasoline comes down with it, said Catherine Wolfram, a former deputy assistant secretary for climate and energy economics at the Treasury Department.

“Economists talk about what's called rockets and feathers — that gas prices go up like rockets when oil prices go up, but then if oil prices go back down … they go back down like feathers,” said Wolfram, who is now a professor of energy economics at the MIT Sloan School of Management.

“Especially if you're coming into the period when [gas prices] tend to rise because of summer driving, they might just stay high, even if oil prices go back down,” she said.

The Development Finance Corporation announced new details Friday on the insurance program aimed at getting tankers moving again, which it said would cover losses up to $20 billion.

“We are confident that our reinsurance plan will get oil, gasoline, LNG, jet fuel, and fertilizer through the Strait of Hormuz and flowing again to the world,” DFC CEO Ben Black said in a statement.

Ben Cahill, an oil analyst and nonresident fellow at Arab Gulf States Institute, said the insurance backstop does not alleviate the fear of being attacked by Iranians, who are “obviously desperate and backed into a corner.”

“The measures taken could alleviate some of the risks and maybe drive down some of the costs associated with shipping insurance, but the fundamental problem is still there,” he said.

In order to get shipping moving again, “you need a fundamental change in the trajectory of the conflict,” Cahill added.

Wright acknowledged in an interview with ABC News on Thursday night that shipping companies have not been willing to transit the strait even with U.S.-backed insurance.

“Right now, the biggest issue is just physical security,” he said. “You don’t want to run a large tanker ship through the Strait of Hormuz today, but that’ll change in the not too distant future.”

Wright said the U.S. military would begin providing escorts to oil tankers “as quickly as we can,” but its immediate focus was on suppressing Iranian attacks.

“First we’ve got to get their ability to cause trouble way down, and then as soon as it’s reasonable to do it, we’ll escort ships through the straits and get the energy moving again,” he said.