The White House Isn’t Panicking About Oil Prices. That May Change In A Few Weeks.

The Trump administration believes it can withstand a brief spike in oil prices — for as many as four weeks, as one person close to the White House suggested — before the political hit does lasting damage.

Administration officials’ confidence was bolstered Tuesday when oil dropped to $80 per barrel, down from $120 this weekend, reinforcing their view that the spikes are temporary and manageable.

They have three to four weeks “where they can ride out what they need to” before oil prices become a more durable political problem, said the person close to the White House, who like others in this story was granted anonymity to share details of private conversations.

“Assuming the economy continues to turn around once the active part of the war is concluded, you’ll have the whole summer from May through August to ride the turnaround,” the person said.

A former Trump administration official added that the administration needs a “consistent, multi-week read” of oil prices before it shifts its approach.

"These temporary little gyrations are not what they're going to be basing their policy on,” the official said.

Those two people, as well as a current U.S. official, said the administration never seriously considered altering its military strategy in the face of oil price hikes.

Still, the administration was caught off guard by the speed and severity of the Sunday spike, a fourth person close to the White House said.

“At the worst moments [Sunday] night, it was insane,” the fourth person said. “That definitely surprised me, and it absolutely surprised them."

Instead of changing course, the administration spent much of Monday trying to soothe spooked traders worried about the disruptive impact of a prolonged war on oil supply chains. Officials also tried to allay the fears of uneasy Republicans, who see the Iran war as counter to the affordability message they believe the GOP should be pushing as it battles to retain control of Congress in the midterms.

More than 7 in 10 voters said they are very concerned or somewhat concerned that the war will cause oil and gas prices to rise in the United States, according to a recent Quinnipiac Poll.

White House spokesperson Taylor Rodgers said that Trump has made it clear that increased oil and gas prices are “short-term disruptions.”

“Ultimately, once the military objectives are completed and the Iranian terrorist regime is neutralized, oil and gas prices will drop rapidly again, potentially even lower than before the strikes begin,” Rogers said. “As a result, American families will benefit greatly in the long-term.”

In the meantime, the White House is taking steps to address oil prices, such as considering lifting sanctions on Russian oil, and continuing to telegraph that the war will be a short one.

"I get a sense of concern from the administration, but not panic,” said another U.S. official, familiar with energy issues. “It’s more a curiosity — ‘Why is this happening? Aren’t there ways to counteract this? Aren’t there quick fixes to deal with this?’"

Still, it’s not clear that oil prices will immediately return to their prewar levels. When it comes to oil prices, there’s the market psychology and there’s reality, including how long it takes Gulf countries to restart production if problems in the Strait of Hormuz force them to shutter operations, said Ilan Goldenberg, a former Biden administration official who dealt with the Middle East.

“I have very little confidence in this White House, given how little they planned for the outcome of this war, that they have mapped out all the second- and third- order effects to oil supplies and the oil markets,” Goldenberg said.

U.S. intelligence has also started to see signs that Iran is preparing to deploy mines in the Strait of Hormuz, according to CBS News, which could further complicate a return to normal oil production post-war. Trump said Tuesday he has seen no official reports that Iran is doing that.

While temporary spikes in oil prices aren’t making the White House balk publicly, it is grappling with a host of other pain points.

The public remains skeptical about the war and uncertain about its goals, and support is likely to erode if service member casualties increase.

Seven service members have died since the start of the war a little more than a week ago. That includes six Americans who were killed after an Iranian drone strike in Kuwait and a seventh who died from injuries sustained when Iran struck a Saudi military base where U.S. troops were stationed. The Pentagon said Tuesday that about 140 U.S. service members have been injured since the war started.

“This war is already unpopular with the American public, but it can get even more so,” a former administration official said. “A mass casualty event, either on the battlefield or from a terror attack here at home, is a real risk. If that were to occur, coinciding with a spike in oil prices and the inflationary implications of shipping lanes being shut down, it could set off a much wider panic both on Wall Street and on Main Street.

One thing that doesn’t appear to be driving White House decisionmaking on Iran: outcry over civilian casualties. The U.S. is investigating who is responsible for a Tomahawk missile that hit an Iranian elementary school, killing 175 people, many of them children.

“No nation takes more precautions to ensure there’s never targeting of civilians than the United States of America,” Hegseth said during a press conference Tuesday morning. “We take things very very seriously and investigate them thoroughly.”

The U.S., meanwhile, is facing pressure from its Middle East allies to soon bring the war to a close. A person familiar with Saudi Arabia’s discussions on Iran said that the Saudis want the war to end and they “are telling the U.S. to make sure the Iranian infrastructure of oil is not hit so Iranians don't become desperate. They have to give the Iranians an off-ramp.”

If the war does drag on, however, there may be little the administration can substantively do to undo the economic damage caused by spiked oil prices.

“One good thing that Trump did say was, ‘We're a strong economy. Look, a short term spike in energy prices isn't something to panic about.’ And, yeah, I think that's exactly right ... If somehow there's some kind of real settlement and things go back to normal, prices will gradually go down,’” said a former Treasury official. But if it doesn’t, “there’s no magic button that’s going to address high energy prices.”

Eli Stokols and Jack Detsch contributed to this report.