Report Says Trump Team Assessed $200 Oil Price Extreme Scenario, but White House Denies

Trump administration officials are reportedly assessing the potential impact of oil prices soaring to $200 per barrel on the economy, indicating that high-level government officials are already studying the economic consequences under an extreme scenario of a war with Iran. The White House immediately denied this claim, calling the reports "false information."

On March 25, according to media reports, informed sources revealed that U.S. Treasury Secretary Scott Bessent had expressed concerns about the conflict driving up oil prices and harming economic growth even before the hostilities began. Senior Treasury officials have also been consistently conveying concerns to the White House regarding oil and gasoline price volatility for weeks.

White House spokesperson Kush Desai denied the aforementioned description, stating that officials have not specifically studied the possibility of oil prices rising to $200 per barrel, and that Bessent is not concerned about short-term disruptions caused by "Operation Epic Wrath."

Since the joint U.S. and Israeli attacks on Iran on February 28, international oil prices have climbed significantly. WTI crude oil has risen about 30% to $91 per barrel, and Brent crude oil has increased nearly 40% to approximately $102 per barrel. The sustained upward trend in oil prices is transmitting to inflation, monetary policy, and global economic growth prospects, keeping the market highly vigilant.

Extreme Scenario Modeling: Routine Assessment or Crisis Warning

According to reports, informed sources claim that Trump administration officials are modeling the potential damage that a sharp increase in oil prices could inflict on economic growth prospects. The sources emphasized that such modeling is part of routine assessments during times of crisis and does not represent a prediction of future trends; the purpose is to ensure the government can respond to various possible situations, including the risk of a prolonged conflict.

Reports indicate that White House spokesperson Kush Desai disputed this. He stated that while the government is indeed assessing different price scenarios and their economic impacts, officials have not specifically studied the possibility of oil prices rising to $200 per barrel. He also mentioned that Bessent has repeatedly expressed his and the current administration's sustained confidence in the long-term trajectory of the U.S. economy and global energy markets.

Notably, U.S. Secretary of Energy Chris Wright stated on March 12 that an oil price surge to $200 per barrel is "unlikely" to occur.

Reports suggest that an oil price of $200 per barrel would constitute a massive shock to the global economy. In inflation-adjusted real terms, oil prices have only touched this level in the past half-century just before the outbreak of the 2008 global financial crisis.

Even if oil prices do not reach this extreme level, some institutional forecasts show that if oil prices remain at $170 per barrel for several months, it will drive up inflation in the U.S. and Europe and drag down economic growth.

In the U.S., the most direct impact would be a roughly 30% increase in retail gasoline prices, erasing the declines of the past year—declines that had been one of the proud economic achievements of the Trump administration.

Inflation and Monetary Policy: Central Banks Face Pressure

Rising oil prices are triggering a chain reaction in monetary policy worldwide.

European Central Bank President Christine Lagarde stated last week that the current hostilities have exacerbated inflation risks. Central bank officials in Germany, the UK, and Japan are preparing for interest rate hikes as early as next month.

In the U.S., the Federal Reserve's monetary policy outlook is also becoming increasingly complex. Fed Chair Jerome Powell stated last week that it is too early to assess the impact of surging oil prices on the U.S. economy, indicating that the Fed is in a wait-and-see mode with rising uncertainty regarding its policy path.

Trump previously stated that he is not concerned about rising energy costs, even suggesting they could be beneficial for the U.S., and predicted that oil prices would fall sharply after the war ends.