Trump acknowledges spike in oil prices from Iran war, promises 'prices are going to drop'

WASHINGTON

President Donald Trump acknowledged the economic toll that the US and Israeli war on Iran is having on oil prices, but promised Americans that they will drop after the conflict ends.

"If we have a little high oil prices for a little while, but as soon as this ends, those prices are going to drop, I believe, lower than even before," the president told reporters in the Oval Office as he hosted German Chancellor Friedrich Merz.

Oil prices have surged since Trump and Israel launched attacks across Iran that have eliminated senior leaders, including Supreme Leader Ayatollah Ali Khamenei, beginning in the early morning hours of Saturday.

Iran has retaliated with sweeping barrages of its own that have targeted US bases, diplomatic facilities and military personnel across the region, as well as multiple Israeli cities. The attacks have continued to escalate.

Oil prices were already trending higher before the strikes. On Feb. 27, Brent crude closed up 2.8% at $73 per barrel, while West Texas Intermediate (WTI) gained 2.6% to $67.17.

With markets closed Feb. 28 and March 1, reports of US-Israeli strikes on Iran prevented an immediate price reaction. But an accumulated geopolitical risk premium materialized in a sharp opening at the start of the week.

On March 2, Brent jumped 7.1% to close at $78.15, while WTI rose 6.2% to $71.33, pushing oil prices to recent highs.

Later in the day, remarks by Brig. Gen. Ebrahim Jabbari, a senior adviser to the Islamic Revolutionary Guard Corps commander-in-chief, claiming that vessel and oil tanker transit through the Strait of Hormuz had been halted and warning that ships attempting passage would be targeted, intensified concerns about deeper supply disruptions.

The statement, delivered during relatively thin global trading hours March 2, drove Brent to test $80.80 in early Asian trading, marking its highest in nearly 15 months.

Merz accepted the effect of the war on his country, saying, "This is, of course, damaging our economies."

"This is true for the oil prices, and this is true for the gas prices as well. So, that's the reason why we all hope that this war will come to an end as soon as possible," he said.

"And we are hoping that the Israeli and the American army are doing the right things to bring this to an end, and to have really a new government in place who is coming back to peace and freedom," he added.