White House loses control as energy markets react to war

Oil prices are blowing past warning levels, and President Donald Trump is now caught in the same economic trap that destroyed Joe Biden’s approval ratings.

The situation started spiraling Thursday night when Israel launched airstrikes on Iran, and by noon Friday, the global benchmark for oil had jumped to $73 per barrel, up $8 in just over a day. Analysts say this is only the beginning.

If the fighting escalates and hits key export points, oil could climb to $100 per barrel, a price the world hasn’t seen since Russia’s Ukraine invasion in 2022. For a president who campaigned on lowering energy costs, the timing couldn’t be worse. The war is happening thousands of miles away, but the financial hit is coming straight to Americans’ pockets.

White House loses control as energy markets react to war

Patrick De Haan, a fuel analyst at GasBuddy.com, predicted gas prices could rise by 25 cents a gallon in the next few weeks. As of Friday, the average was already $3.13 per gallon. Natural gas and electricity bills are also rising, and Trump’s administration now has fewer options than Biden had when he faced a similar energy crisis.

Trump is already showing signs of frustration. At a bill signing on Wednesday, he turned to Energy Secretary Chris Wright and said, “I was going to call and really start screaming at you,” complaining about prices rising even before Israel struck. He campaigned last year on slashing energy costs, and now the markets aren’t listening.

Bob McNally, who leads Rapidan Energy and previously served on the National Economic Council, warned: “Geopolitical price spikes pose a bigger risk of recession than inflation in my view. The White House should be worried.” And it’s not just inflation — it’s the whole economic stability of the country at risk. Any more chaos could hit demand, crush consumer spending, and slam asset prices across the board — especially crypto.

Even though Friday’s gas prices are 33 cents lower than this time last year and $1.88 below the June 2022 peak, that buffer could vanish overnight. Andy Lipow, head of Lipow Oil Associates, said if Israel hits Iran’s oil facilities, prices could spike another $7.50 a barrel. If Iran fires back and shuts down the Strait of Hormuz — the key oil shipping route in the Gulf — “we could see $100 oil,” Lipow said.

“Iran knows full well that President Trump is focused on lower energy prices,” Lipow added. “Actions by Iran that impact Middle Eastern oil supplies raising gasoline and diesel prices for Americans are politically damaging to the president.”

Trump’s tools to lower prices are almost gone

Trump doesn’t have many levers left. His biggest card is the Strategic Petroleum Reserve, but it’s already been drained. Biden used it heavily after Russia’s invasion, selling over 40% of it. What’s left now is about 402 million barrels, down from 626 million in early 2021. Tapping into it again could leave the US vulnerable in another emergency.

Wright’s Department of Energy claims they’re tackling the issue. Andrea Woods, a DOE spokesperson, said in an email: “While oil prices are dictated by supply and demand, the Trump administration is reducing regulatory costs and removing red tape holding back energy production, delivering lower energy costs for the American people.”

But the markets clearly don’t care about talking points. Before the attacks, oil was nearly $20 below its price when Trump took office this January. That drop happened mostly after Trump announced his “Liberation Day” tariffs in April. Those tariffs scared markets enough to pull prices down, with fears of slowing global demand. OPEC also increased production during that stretch, easing the pressure. But now those gains are gone.

Tamas Varga, from PVM Oil Associates, said the rally might pause, depending on how this plays out. “Given that the situation is fluid, it would not be surprising to see prices remain stable ahead of the weekend,” he said. But he warned next week could bring a bounce back. “If there is no tangible supply shock, the current rally will not be maintained.”

Still, the timing couldn’t be worse. Trump had a political edge from those earlier low prices. Kevin Book, director at ClearView Energy, said that might shield some public backlash — but not for long. “Politically, that offers Trump some headroom,” Book said. “But, of course, Trump didn’t campaign on keeping energy costs the same. He campaigned on bringing them down.”

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