Strait of Hormuz Crisis: Trump’s Limited Options to Calm Oil Markets

Donald Trump’s options to reverse soaring oil prices triggered by escalating tensions in Iran are severely limited unless he can rapidly reopen the Strait of Hormuz to allow crude to flow from the Gulf, experts warn. The administration has unveiled plans for government-backed insurance and potential naval escorts for tankers, alongside easing sanctions on some Russian oil, but the core challenge remains securing safe passage through the critical waterway.

The Strait of Hormuz Bottleneck

The conflict in Iran has sent crude prices surging, creating a potential domestic political challenge for the administration. Brent crude settled at $92.69 a barrel on Friday, March 8, 2026, up 28 percent for the week to its highest level since 2023. West Texas Intermediate jumped 36 percent to $90.90 a barrel, marking its largest weekly gain since 1983. Goldman Sachs has cautioned that crude prices could surpass $100 a barrel next week “if no signs of solutions emerge by then,” potentially exceeding 2008 and 2022 peaks and pushing gasoline prices to record levels.

More than 14 million barrels per day of crude passed through the Strait in 2025, representing about a third of all seaborne oil exports globally, according to energy consulting firm Kpler. Approximately 100 tankers and cargo vessels typically transit the Strait daily, but currently around 400 tankers are stuck in the Gulf due to the ongoing instability. Fewer than 50 ships have passed through the strait in the past week.

Limited Response Options

Experts emphasize that clearing the Strait of Hormuz is the most effective way to stabilize oil markets. Mike Sommers, CEO of the American Petroleum Institute, stated that other options “would have a marginal impact on price.”

Washington’s ability to respond is complicated by the depleted state of the Strategic Petroleum Reserve (SPR), which was significantly drawn down in 2022. Republican Congress member August Pfluger criticized the previous drawdown, stating it left the U.S. “in an extremely vulnerable position.” An SPR release is not currently under consideration, according to National Economic Council director Kevin Hassett, who believes military action against Iran will calm the market.

The administration has as well explored increasing oil flows from Venezuela, following a change in leadership there, and temporarily eased sanctions on Russian crude sales to India, with the possibility of further waivers to increase market liquidity. Treasury Secretary Scott Bessent indicated a willingness to potentially lift sanctions on additional Russian oil, citing hundreds of millions of sanctioned barrels “on the water.”

Challenges to Tanker Escorts and Insurance

The administration announced a $20 billion reinsurance scheme through the Development Finance Corporation to provide coverage for tankers traversing the strait. However, insurance specialists have questioned the agency’s capacity to provide sufficient coverage to restore shipowner confidence. Shipowners are demanding security guarantees before resuming shipments.

Differing Perspectives on the Path Forward

Some analysts criticize the administration’s handling of the situation, warning of a potential market meltdown if the Strait remains closed. Michael Alfaro, CIO at Gallo Partners, suggested a rapid reopening of the Strait is crucial to avoid another spike in commodity prices.

Others, like former Energy Secretary Dan Brouillette, argue for a longer-term perspective, believing that removing the current Iranian regime will ultimately resolve the issue and secure the Strait for decades to come.

Key Takeaways

• The closure of the Strait of Hormuz is the primary driver of surging oil prices.
• The U.S. Strategic Petroleum Reserve is currently depleted, limiting immediate response options.
• Tanker escorts and insurance schemes face challenges in providing sufficient security and coverage.
• A lasting solution requires addressing the underlying threat to maritime traffic in the region.