President Trump’s Limited Options to Combat Rising Oil Prices Amid Iran Conflict

The Challenge of Soaring Energy Costs

As oil prices have climbed approximately 20% since the beginning of the U.S. conflict with Iran on February 28th, President Trump finds himself in a difficult position with few effective tools to bring relief to American consumers facing higher fuel costs. Experts agree that while several strategies exist on paper, the reality is that the president’s ability to meaningfully impact energy prices remains severely constrained, particularly if the military conflict extends over several months. Patrick De Haan, a petroleum analyst at GasBuddy, summarized the situation bluntly when he told CBS News that “there’s not a whole lot of levers that are going to be influential at this point.” The most impactful action the administration could take would be working toward restoring confidence and security in the Strait of Hormuz, the critical waterway through which 20% of the world’s oil supply flows. Both energy and security experts unanimously agree that ending the Iran conflict entirely, or at minimum establishing military security over this vital shipping channel, represents the most effective path toward reducing oil and gas prices. However, this task could become exponentially more challenging if Iran decides to deploy naval mines in the strait, further complicating an already tense situation. In the immediate term, Trump’s most readily available tool may simply be his ability to influence market sentiment through public statements—a strategy that showed some effectiveness when oil prices dropped sharply after he told CBS News the war with Iran was “very complete,” temporarily calming investor fears about a prolonged conflict.

Tapping Into America’s Oil Emergency Fund

One of the most direct options available to the Trump administration is releasing oil from the Strategic Petroleum Reserve (SPR), a resource established in the 1970s specifically to protect the American economy from the kind of disruptions caused by the 1973-74 oil embargo. This emergency fund was designed to cushion the nation against supply shocks caused by natural disasters or geopolitical disruptions. Both the president and the U.S. energy secretary have the authority to authorize releases from the SPR without congressional approval, according to the Department of Energy. Recent reports from the Financial Times indicate that finance ministers from the G7 nations have already met to discuss coordinating a release of petroleum through the International Energy Agency’s reserves in conjunction with the SPR. According to JPMorgan commodity analysts, together these reserves could release approximately 1.2 million barrels per day into global markets. However, they cautioned that even this substantial release “would not offset potential losses” from halted shipments through the Strait of Hormuz, which could soon reach 12 million barrels per day if the conflict escalates further. While tapping the SPR could help cool markets and provide some relief, De Haan noted that without securing the Strait of Hormuz, this strategy alone is unlikely to bring oil prices back down to the levels seen before the U.S. and Israel attacked Iran late last month. The SPR has been used several times in recent history, most notably during the pandemic when the Biden administration released approximately 200 million barrels of crude in 2022—the largest such release in U.S. history—which according to the Treasury Department reduced gas prices by 17 to 42 cents per gallon when coordinated with releases from other countries.

Restricting Exports and the Risk of Unintended Consequences

Another option on the table involves restricting U.S. oil exports, a significant consideration given that America has transformed into a major oil exporter, currently sending an average of about 10.2 million barrels of petroleum per day to international markets—more than it imports, making the United States a net oil exporter. President Trump possesses the legal authority to restrict crude oil exports during a declared national emergency, according to JPMorgan analysts. In the short term, such a move could help reduce domestic oil prices by essentially trapping U.S.-produced crude within American borders, increasing domestic supply and theoretically lowering prices for consumers at the pump. However, this approach carries significant risks over the longer term that could ultimately backfire on the administration’s goals. By restricting exports, the economic incentives that currently drive domestic oil production would be weakened, as U.S. producers would lose access to lucrative international markets. This reduction in profitability would likely lead producers to scale back production, which would tighten global oil supplies overall. As global supplies tightened, pressure would build on both international and domestic fuel costs, potentially leaving American consumers worse off than before the export restrictions were implemented. This classic example of unintended consequences highlights the complexity of energy markets and why experts caution that simple solutions rarely work as planned in interconnected global commodity markets.

Tax Breaks and Legislative Hurdles

Suspending or reducing fuel taxes represents another potential avenue for providing relief to American consumers struggling with higher prices at the pump. Currently, the federal government levies a tax of 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel fuel, with this revenue dedicated to financing the Highway Trust Fund that maintains America’s road infrastructure. Temporarily suspending these taxes could provide immediate, tangible relief to consumers filling up their tanks. However, this option faces a significant political obstacle: because these taxes are embedded in the IRS tax code, Congress would need to pass legislation to suspend them—a high hurdle given the deep partisan divisions that currently characterize Washington politics. The likelihood of achieving bipartisan consensus on this issue in the current political climate appears slim, making federal fuel tax suspension an unlikely solution despite its potential benefits. A more realistic alternative, according to JPMorgan analysts, would be for individual states to suspend or reduce their own fuel taxes, which range from as low as 15 cents to more than 50 cents per gallon depending on the state. State-level tax suspensions would “provide short-term relief for consumers” and could be implemented more quickly without requiring federal legislative action. The primary downside to this approach is that it would reduce the tax revenue that states depend on to maintain their road infrastructure, potentially creating longer-term problems with deteriorating highways and bridges while providing only temporary price relief.

Regulatory Adjustments and Maritime Law Waivers

Beyond direct market interventions, the Trump administration could pursue several regulatory adjustments that might provide modest relief to fuel prices. One option involves waiving the Jones Act, a maritime law that requires goods shipped between U.S. ports to be transported on ships that are U.S.-built, U.S.-flagged, and staffed by U.S. crews. The Trump administration has the authority to suspend this law if deemed necessary for national defense or during emergencies. JPMorgan analysts suggested that “combining a release from the SPR with a temporary waiver of the Jones Act would make the policy more effective,” as it would allow greater flexibility in moving petroleum products between American ports using more cost-effective foreign-flagged vessels. Another regulatory option involves relaxing the summer gasoline rules that currently govern fuel blends during hot weather months. Federal regulations require gas stations to stop selling a gasoline blend called E15 from June 1st to September 15th because its higher ethanol content causes it to evaporate more easily in hot weather, potentially contributing to air pollution and smog formation. Because E15 is typically cheaper than other gasoline blends, temporarily relaxing this regulation could provide some price relief to consumers during the crucial summer driving season. This approach has precedent—the Environmental Protection Agency issued an emergency waiver last summer that allowed E15 to be sold during the warmer months. According to JPMorgan analysts, such waivers “effectively increase the available gasoline pool by allowing higher ethanol blending, which can modestly expand supply and help ease pressure on pump prices during periods of tight fuel markets.” However, they cautioned that the overall impact on gas prices would be “limited” at best, representing only a small piece of a much larger puzzle.

The Bottom Line: No Easy Answers to a Complex Problem

The fundamental reality facing President Trump and his administration is that there are no simple solutions or magic wands when it comes to controlling oil prices, especially during an active military conflict that threatens one of the world’s most critical oil shipping chokepoints. Each potential option carries its own set of limitations, trade-offs, and unintended consequences that must be carefully weighed against short-term benefits. Releasing oil from the Strategic Petroleum Reserve can provide temporary market relief but cannot offset the massive potential supply disruptions if the Strait of Hormuz becomes impassable. Restricting exports might lower domestic prices initially but would ultimately discourage production and lead to tighter supplies. Tax suspensions face political obstacles at the federal level and would reduce infrastructure funding at the state level. Regulatory waivers like those for the Jones Act and summer fuel blends can help on the margins but won’t fundamentally change the supply-demand dynamics driving prices higher. At the end of the day, the most effective strategy remains the most difficult to achieve: ending the conflict with Iran or at minimum securing safe passage through the Strait of Hormuz. Until one of these outcomes is achieved, American consumers should prepare for continued volatility in energy prices, and the president’s ability to provide relief will remain frustratingly limited despite the political pressure to take action. This situation serves as a reminder of how interconnected global energy markets have become and how even the world’s largest oil producer has limited control over prices when geopolitical tensions disrupt the delicate balance of global supply and demand.