Trump's energy chief blames oil price spike on market fear
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A person points at a page on the Marinetraffic website showing commercial boat traffic on the edge of the Strait of Hormuz on March 4. Photo: Julien de Rosa / AFP via Getty Images
The Trump administration's top energy official argued Sunday that fear — not supply shortages — is driving a historic surge in oil prices.
The big picture: The world is well-supplied with oil, but markets are reacting to real-world disruptions — a strangled Strait of Hormuz, halted production and strikes on fuel storage.
- The administration is road-testing a political argument to insulate itself from pocketbook pain in a midterm year.
- The record-breaking surge lifted gasoline 47 cents a gallon in the last week and diesel 83 cents a gallon, per AAA.
What they're saying: Energy Secretary Chris Wright told Fox News Sunday that the price run-up "has nothing to do with any shortage of barrels of oil or natural gas. It's just fear and perception."
- He repeated that argument on CNN, calling the spike "a little bit of fear premium" but saying "the world is not short of oil today or natural gas."
- Translated into Sen. John Kennedy's (R-La.) fashion-forward argument on "Fox News Sunday," prices "have gone up because you have a bunch of oil traders out there in their Gucci loafers with their caramel Frappuccinos who are bidding up the price."
- In the worst case, Wright said on CBS News' "Face the Nation," the price surge will last weeks. He cited "emotional reactions and fear that this is a long-term war." He said it is not; rather, "it's a temporary movement."
Our thought bubble, from Axios' Ben Geman: Prices are soaring for multiple reasons — and the vibes Wright and Kennedy are citing are real. Traders bid up prices in response to supply threats even before any physical shortages.
- But fear is just part of the equation. The Iran war shut down the Strait of Hormuz, backing up the region's oil systems, with some producers cutting back production as storage space fills up.
State of play: While Wright projects optimism, administration officials are floating ways to contain the cost increases.
- Trump has pitched plans to offer political risk insurance and naval escorts to tankers, and on Thursday, the Treasury Department issued a 30-day sanctions waiver to enable Indian refiners to buy more Russian oil.
- But White House press secretary Karoline Leavitt framed the thinking directly on Fox News' "Sunday Morning Futures": The rise in oil prices is "a short-term disruption for the long-term gain of taking out the rogue Iranian terrorist regime and finally ending their restriction of the free-flow of energy in the Middle East."
The details: The global oil market has been in "significant surplus" since the start of last year, per the International Energy Agency, and ahead of the strikes on Iran, global supply was set to exceed demand.
- But "prolonged supply disruptions could flip the market into a deficit," according to the IEA analysis.
Threat level: The Joint Maritime Information Center said in recent notes that routine commercial traffic in the crucial passage had seen a "near-total temporary pause."
- Wright said Sunday that a "large tanker" recently made its way through the waterway.
- But the historical traffic average is upward of 130 vessels a day, a large slice of which are oil and gas tankers. An average of 20 million barrels per day of crude oil and oil products passed through in 2025, per the IEA.
Zoom out: Wright also emphasized on CNN's "State of the Union" that the U.S. is "targeting zero energy infrastructure," despite the fiery Israeli strikes on Iranian fuel depots.
What we're watching: The conflict is playing out in a critical midterm year where voters' price of living concerns are paramount.
Go deeper: Trump vows to step up Iran bombing, as gas price surge worsens
