The Trump administration is considering several options to combat surging oil and petrol prices following the conflict involving Iran. Crude oil prices temporarily surpassed $US100 per barrel before stabilising, while average US retail petrol prices have reached their highest levels since August 2024. Officials have discussed measures including releasing emergency oil stockpiles, pausing the federal petrol tax, and the US Treasury Department’s involvement in the oil futures market.
The potential petrol tax pause would require Congressional approval, a hurdle former President Biden failed to overcome in 2022. Questions also exist regarding the effectiveness of Treasury involvement in oil futures trading. The Strait of Hormuz, a critical transit route for approximately one-fifth of the world’s oil, remains significantly disrupted due to the conflict. Brent crude prices had surged by over 60 per cent since the war began, reaching nearly $US120 a barrel, before paring gains as major economies considered coordinated action.
President Trump stated he has a plan to address energy cost concerns but offered no specifics. He also commented on increased ship traffic in the Strait of Hormuz, raising the possibility of further intervention. The White House is evaluating tapping into the US Strategic Petroleum Reserve, an emergency oil supply created in the 1970s, which is currently about 60 per cent full with 415 million barrels of crude.
A coordinated release of oil stockpiles with other nations is also being considered. G7 ministers have indicated their readiness to release stocks if necessary, but have not yet acted. Other options being considered is halting the federal petrol tax. One option Trump has ruled out for now is seizing Iranian oil. Analysts caution that even coordinated releases might have limited impact depending on the conflict’s duration and Strait of Hormuz disruptions.
