Panicked Trump administration officials are putting contingency plans in place in case the war in Iran triggers an even worse oil crisis, according to a report.
President Donald Trump’s team is examining how best to cope and exploring worst-case scenarios if the price of crude oil skyrockets to as much as $200 a barrel, sources told Bloomberg.
The administration is also looking at other potential nightmare scenarios, such as Trump’s multibillion-dollar war continuing for an extended period of time, which is looking increasingly likely as the conflict drags on with no real end in sight.
Officials were keen to stress that preparing for a potential spike in oil prices as high as $200 a barrel, and the devastating economic impact that would have on the U.S. economy, is part of normal planning during times of unrest, rather than an actual prediction.
Trump’s war in Iran has already sparked a worldwide oil crisis after Iran closed off the Strait of Hormuz, the vital shipping route through which around one-fifth of the world’s oil passes, in retaliation for U.S. and Israeli attacks.
The closure of the narrow water passage between Iran and Oman has already seen oil prices rise to around $100 a barrel, in turn sending gas prices higher in the U.S. Multiple economists are already expressing fears that the oil crisis could send the U.S. into a recession, even if prices do not reach $200 a barrel.
Moody’s Analytics’ model has raised its recession outlook for the next 12 months to 48 percent, with Moody’s chief economist, Mark Zandi, warning that oil prices hitting $125 could be the tipping point.
“With tensions still elevated, that’s not a stretch,” Zandi posted on X on Monday.
Crude oil hitting $200 would be catastrophic for the world economy. The only other time it approached that devastating milestone in the last half-century was just before the global financial crash in 2008.
Bloomberg Economics forecasts that even if oil reached $170 per barrel, it would trigger a sharp rise in U.S. inflation—an issue Trump vowed to bring under control during his 2024 presidential campaign.
White House spokesman Kush Desai described the doomsday contingency plans as “false.”
“While the Administration is always evaluating various pricing scenarios and economic impacts, officials are not examining the possibility of oil reaching $200 per barrel and Secretary Bessent has not been ‘worried’ about the short term disruptions from Operation Epic Fury,” Desai told the Daily Beast.
Another top Trump official who is not concerned about the “short-term” economic damage of the war in Iran is the president himself.
Speaking to House Republicans at the National Republican Congressional Committee fundraising dinner in Washington, D.C., on Wednesday, Trump admitted he didn’t care that his war could further worsen millions of Americans’ financial hardships.
“I thought it was going to be much worse. I thought that the energy prices, oil prices, would go up higher. I thought the stock market would go somewhat lower,” Trump said. “But it didn’t matter to me. It’s short-term.”
