The deliberations reflect White House worries that the surge in oil prices following more than a week of US and Israeli strikes on Iran will hurt US businesses and consumers ahead of the November midterm elections, when Trump’s fellow Republicans hope to retain control of Congress.
Trump told reporters in Florida on Monday that his administration was lifting sanctions on some countries as part of efforts to stabilise the oil market, but declined to provide details.
“So we have sanctions on some countries. We’re going to take those sanctions off until the Strait is up,” he said.
Easing sanctions on Russia would potentially boost world supplies of oil at a time of massive disruptions to Middle East shipments from the expanding Iran conflict. But it could also complicate US efforts to deprive Russia of revenue for its war in Ukraine.
Trump added later in the press conference that he had a “very good call” with Russian President Vladimir Putin about the war in Ukraine.
Analysts and industry officials have said the White House has few meaningful tools to quickly curb rising oil prices unless authorities can restore the flow of tankers through the Strait of Hormuz, the narrow waterway between Iran and Oman that carries roughly a fifth of the world’s oil supply.
A previously announced White House plan to provide naval escorts and backstop insurance for tankers travelling the Strait of Hormuz so far has failed to significantly boost shipping traffic through the vital waterway.
“The problem is options range from marginal through symbolic to deeply unwise,” said one of the sources, who is engaged with the White House on the effort.
The turmoil in energy markets comes at a sensitive moment for Trump, who has sought to keep fuel prices low as a cornerstone of his economic message to voters. A prolonged spike in oil and gasoline costs could ripple through the broader economy, raising transportation and consumer prices.
Easing sanctions on Russia could include broad relief or more targeted options that would allow certain countries to buy Russian oil without fear of US penalties, three sources told Reuters, speaking on condition of anonymity.
The US last week had already issued a temporary waiver allowing India to purchase certain Russian oil cargoes to help it cope with the loss of Middle Eastern supply. US officials in Washington have separately been discussing with counterparts from the Group of Seven major economies a possible joint release of crude oil from strategic reserves.
US Energy Secretary Chris Wright confirmed on Monday that the US is considering coordinating sales of oil from the US Strategic Petroleum Reserve, but no decision had been made. He added that the US was not considering imposing restrictions on exports of US energy as a way to control prices.
Other policy options available to Trump include intervening in oil futures markets, waiving some federal taxes and lifting requirements under the Jones Act, a law that mandates domestic fuel move only on US-flagged ships, the sources said, speaking on condition of anonymity.
In a post on his social media platform Truth Social on Sunday, Trump downplayed the price spike, saying the surge will be temporary and “is a very small price to pay for USA”
On Monday, Trump said he expected the longer-term impact of the war on Iran to be lower prices for American consumers. (Reuters)
Edited by Cecil Wong
