U.S. running out of ways to lower oil prices. It's up to the military

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The Trump administration has rolled out a series of measures to attempt to blunt the blow of the Iran-driven oil-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 of ending 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 President Donald Trump has 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, the International Energy Agency estimated Thursday. That accounts for the near-closure of the Strait 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.

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Iran is a military problem. “The only thing prohibiting transit in the straits is Iran shooting at shipping,” Defense Secretary Pete Hegseth said 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 Wright told CNBC Thursday. Without military assistance, ship captains aren’t likely to budge, even if the U.S. government helps them find more insurance. Even then oil traffic probably won’t look like normal.

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