NEWS

Analysis: The U.S. is running out of ways to get oil prices down. It is up to the military.

Iran's threat to the Strait of Hormuz can't be fixed by releasing oil from strategic petroleum reserves.

By CNBC

• March 13, 2026 at 5:01 PM

Analysis: The U.S. is running out of ways to get oil prices down. It is up to the military. Photo: CNBC

The Trump administration has rolled out aseries of measuresto attempt toblunt the blowof the Iran-drivenoil-price hike, and yet prices remain stubbornly high.

As the war rolls on, it is becoming clear there isn't much the U.S.

or any other government can do to provide relief from higher oil prices short ofending the conflict.

It will take a military breakthrough to get oil flowing and reduce energy prices.

That means this episode is sharply different from past market crises that PresidentDonald Trumphas muddled through.

A pattern of escalating political tensions followed by fast economic relief that has held through Trump's second presidency may finally be breaking.

This is a problem Trump can't solve through economic policy.

The economic math is uncompromising.

The war will cut the global supply of oil by about 8 million barrels a day in March, theInternational Energy Agencyestimated Thursday.

That accounts for the near-closure of theStrait of Hormuz, the narrow waterway bordered by Iran that carries as much as 20 million barrels a day in normal times, as well as the oil industry's attempts to route around the problem and production increases elsewhere.

The Trump administration and other governments are trying to get more oil onto the market, most substantially by releasing some 400 million barrels from strategic reserves.

But it won't come all at once.

The U.S.

portion will amount to about 1.4 million barrels a day over roughly four months, based on plans from theDepartment of Energy.

All told, the global release will amount to perhaps 3 million barrels a day, according to estimates by Goldman Sachs shared with clients.

These figures are rough estimates made quickly during wartime and should be taken with a grain of salt.

But the overall result is clear: Government reserves probably can't make up even half of the daily shortfall driven by the war.

The administration has several other plans in motion.

Treasury SecretaryScott Bessentsaid on Thursday the administration would to ease some sanctions onRussian oil.

The U.S.

International Development Finance Corporation is working on a plan to backstop insurance for ships in the region.

Oil prices rose Friday despite those measures.

A gallon of regular costs $0.69 more Friday than it did a month ago,according to AAA.

That is a 23% increase.

A barrel of oil on the U.S.

market would have cost about $63 in mid-February.

It was $97 at midday Friday.

The White House iswell-aware of Americans' concerns.

The president has said the short-term cost of higher prices is necessary to end the threat of the Iranian nuclear program.

"We expect these prices to come down significantly back down again" once the war is complete, a White House official told CNBC, speaking on condition of anonymity to discuss the administration's strategy.

While Trump and Defense SecretaryPete Hegsethhave been predicting a short war since it began nearly two weeks ago, they have shifted what the end goal is, naming removal of the Iranian regime and security for commerce in the region as well as nuclear concerns.

The oil market was well-supplied before the war.

"The evidence that the bottom can keep falling out is at best highly speculative," the official said.

Still, it is unusual for this president to power through an economic disruption.

Trump normally listens closely to the market.

The most famous episode was last April, when sticker shock over the size of histariff programsent stocks plummeting and nearly broke the Treasury market.

The administration backed off its most extreme plans.

The market learned a lesson embodied in the derisive acronym TACO: Trump Always Chickens Out.

It was never really true that Trump would lose his nerve.

Rather, he would take large risks for uncertain gains and then shift policy and rhetoric when the risks started to materialize.

But in Iran, Trump can't pivot like that, because the driver of prices isn't economic policy that can be easily changed.

Iran is a military problem.

"The only thing prohibiting transit in the straits is Iran shooting at shipping," Defense Secretary Pete Hegsethsaid at a briefing Friday.

The U.S.

wants the Strait of Hormuz open.

Iran doesn't.

And 13 days into the war, despite the incredible firepower the U.S.

and Israel are raining down on Iran, it isn't clear when that might change.

The U.S.

Navy may be able to escort tankers through the strait, but at best that might start by the end of the month,Energy Secretary Christopher Wrighttold CNBC Thursday.

Without military assistance, ship captains aren't likely to budge, even if the U.S.

government helps them find moreinsurance.

Even then oil traffic probably won't look like normal.

The expanding war effort has uncomfortable echoes of the Iraq War.

Tens of thousands of U.S.

troops on the ground weren't enough to end the violence, and the conflict dragged on for nearly nine years.

That said, no one in power is talking openly about sending troops into Iran.

And the U.S.

and global economies may be able to pull through the Iran war, even if oil prices remain high.

The U.S.

economic expansion that began after Covid survived $120-a-barrel oil when Russia invaded Ukraine in 2022.

Gas prices were higher than than they are now as recently as fall 2023.