The Trump administration is racing to contain a spike in energy prices brought about by Iranian attacks on shipping in the Gulf, examining a range of options including escort missions in the Strait of Hormuz and even easing sanctions on Russian oil to ease price pressure.
The price of Brent crude spiked 10 percent in the 24-hours after the start of U.S. and Israeli military operations against Iran and climbed to over $100 throughout the first week of conflict. The benchmark reached around $120 per barrel on March 9 (before retreating over President Donald Trump’s suggestion that the war could end ‘soon’). Faced with incoming Iranian missiles and drones, many local oil fields have scaled back production or shuttered business activity altogether and insurers have canceled coverage for ships attempting to cross the Strait of Hormuz.
Iran’s asymmetric strategy intends to impose economic pain on the U.S. and its allies through drone and missile attacks on regional oil facilities and maritime commercial traffic. As much as 25 percent of the world’s seaborne oil trade transits the Strait of Hormuz, entailing fairly immediate consequences for global oil markets – and the economies powered by them – once faced with disruption.
“We hold the screw of the global oil price in our hands and for a long time the U.S. will have to wait for our actions to control the price,” a senior Iranian official told CNN on the 10th day of the war.
It is unlikely that Iran’s attacks on shipping came as a complete surprise to the White House, as virtually the entire expert community warned for years that Iran would do just that in the event of a major war. What is now to be seen is how adequately the Trump administration planned for it and how the developments influence the administration’s approach to the conflict.
On March 6, the U.S. rolled out a $20 billion reinsurance facility aimed at calming insurers, while suggesting that the U.S. could begin performing escort missions in the Strait of Hormuz to enable the resumption of traffic. Washington is also belatedly considering releasing oil from the strategic reserves to counteract oil’s upward price action, a step that could be coordinated with other G7 countries. Moreover, the Trump administration could even waive sanctions on Russia to promote additional supply of crude oil.
These steps all are intended to resolve or at least delay complications from the technical closure of the Strait of Hormuz, while enabling U.S. military action to continue. And just what is the administration ultimately hoping to achieve in Iran?
President Trump’s policy messaging on the war has careened from one stance to another, sometimes paradoxically so. Asked about what comes next in an interview, President Trump responded, “Forget about next. They are decimated for a 10-year period before they could build it back.” In other interviews the president has mused about having a veto over Iran’s leadership transition process. “I have to be involved in the appointment, like with Delcy in Venezuela,” President Trump told Axios.
One can draw any number of conclusions about the conflict’s direction from the president’s statements, and they have been accompanied by various leaks to the media that the administration is debating everything from an operation to take Kharg Island to an American-backed Kurdish uprising in northwestern Iran. Tehran is at its weakest in decades and Washington has been tempted into regime change in the Middle East plenty before.
But officials in the Cabinet have consistently emphasized a more narrow set of objectives: destroying Iran’s military without the pursuit of loftier goals like regime change.
“The United States is conducting an operation to eliminate the threat of Iran’s short-range ballistic missiles and the threat posed by their navy, particularly to naval assets,” Secretary of State Marco Rubio said at a press conference on March 2. While the U.S. would prefer different leadership in Tehran, this is not an objective of the operation, Rubio emphasized. Defense Secretary Pete Hegseth reiterated that stance on March 10, outlining that the goal is to destroy Iran’s missile stockpile and missile industry, eliminate its Navy, and remove its nuclear weapons program.
And in that regard, the air campaign has certainly inflicted severe damage to Iran’s military capabilities. On March 6, CENTCOM stated that the U.S. had struck over 3,000 targets in Iran since beginning Operation ‘Epic Fury’, complemented by the destruction of 43 Iranian Navy ships. Israel is reported to have conducted around 3,400 airstrikes on Iran in this same period. Iran’s air-defense network is plainly non-functional at this point and its offensive missile arsenal is likely seriously attrited.
“If you look, they have nothing left,” President Trump boasted in an interview with CBS News on March 9. “There’s nothing left in a military sense.” He added that “the war is very complete, pretty much.” That interview sent oil prices tumbling as the market digested the possibility that Washington could declare victory and seek an exit.
The White House originally communicated that it expected the conflict to last at least a few weeks and there will certainly be momentum within the administration to keep up the pace of airstrikes, particularly with obvious military objectives still remaining. Iran appears to have kept some of its missiles and launchers in storage, enabling it to keep up a steady stream of attacks throughout the Gulf even if the rate of fire has diminished over time.
Noticeably, it did not take many Iranian attacks in the vicinity of the Strait of Hormuz to gum up transit through the waterway. Iran struck at least three vessels on March 1 and another four on March 2. The container ship Safeen Prestige was hit and abandoned on March 4, and a tug sent to retrieve it came under fire two days later. Reports suggest Iran may try to mine the Strait. As a result, tanker traffic has largely halted; the Strait is effectively closed. For as long as Iran can maintain a minimum level of credibility to its threats, ships will remain concerned about transit and insurers will have to take the risk seriously and demand commensurately higher premiums for covering passage. All of that in turn puts strong upward pressure on oil prices.
There is also the issue of Iran’s nuclear program. In June 2025, the U.S. performed strategic bombings of several Iranian nuclear sites, capitalizing on Iranian dysfunction as it fought a one-sided air war against Israel. American strikes eliminated much of Iran’s enrichment capacity, but the country still possesses a stockpile of some 450 kilograms of uranium enriched to 60 percent, enough to race for a handful of nuclear devices should Tehran seek to assemble them. The U.S. is reportedly contemplating a ground operation involving special operations forces to retrieve the HEU.
President Trump would like to dictate on his terms when the conflict will end – as he did in essence last June – and his ability to manage fallout in the oil market will heavily influence his flexibility in doing so.
Military markets analyst, covering Eurasia, Middle East, and Africa.
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