Hormuz has to reopen!

‘Hormuz has to reopen’: Why the oil industry can’t help Trump tame rising gasoline prices

Oil industry executives say much of the administration’s messaging on supply disruptions from the Iran war has discouraged drilling.

By Zack Colman, James Bikales and Mike Soraghan

President Donald Trump promised to “drill, baby, drill,” but as the war in Iran stretches into its fourth week, he’s having a difficult time persuading U.S. oil and gas producers to expand production.

The administration has said it’s been reaching out to oil companies to persuade them to speed their drills to help curb the steady rise in gasoline prices caused by the war with Iran, which has caused the largest disruption in global oil supplies in history.

But so far that potential solution — like others before it — has failed to move the needle, as the market chaos brought by the war has left many in the industry unwilling to spend money on potentially unprofitable new wells. Trump himself has said that “when this is over, oil prices are going to go down very, very rapidly” — not exactly a message that will convince companies to start drilling more, industry executives said.

Much of the administration’s messaging has acted as a disincentive for drilling, said an oil and gas executive granted anonymity because they were not authorized to speak with the media. Facing blowback from Trump’s base over getting involved in another foreign war and the broader population for rising costs the intervention has caused, top Trump officials have contended the war will wrap in weeks and prices will quickly plummet.

“[Treasury Secretary Scott] Bessent says oil prices will fall in a few months. It takes several months to stand up a rig and drill from scratch. Why would I expand my drilling campaign now if prices will fall?” that executive said.

Gasoline prices reached a national average of $3.91 a gallon on Friday, drawn up by crude prices that have risen $30 in the three weeks since the war started, potentially threatening Republicans’ chances at the polls in this year’s midterm elections. Prices are expected to climb further as Iran continues attacks on oil tankers traversing the Strait of Hormuz and widens its aggression against oil and gas fields in the Middle East in retaliation against the U.S. and Israeli military strikes that began nearly a month ago.

The U.S. military has started sending more warplanes and helicopters to clear the strait, according to a Pentagon briefing cited Friday by The Wall Street Journal.

“I think they’re looking for solutions,” said one industry executive, granted anonymity because he wasn’t authorized to talk to the media. “I just don’t know that they’ve found any. It’s the apocalypse for the oil and gas industry. The solution is Hormuz has to reopen.”

The administration has started asking companies to increase their oil production to reverse the climb in prices at the pump. Interior Secretary Doug Burgum said on CNBC last week that he expected oil companies to announce “that they’ve increased production, you know, here in the United States in response to the price signals and in response to the need that we have right now.”

The Trump administration’s efforts to temper oil prices come as Vice President JD Vance and Energy Secretary Chris Wright met with oil executives at the American Petroleum Institute board meeting Thursday in Washington. Vance promised the executives that the administration would not ban oil exports in a bid to lower prices, according to a senior official who attended the event.

“I don’t want to get ahead of the president on that, but we recognize this is an issue,” Vance said of gasoline prices during an event in Michigan on Wednesday.

White House spokesperson Taylor Rogers said in a statement that it should not shock oil and gas companies that Trump wants them to produce more.

“President Trump has called on oil companies to ‘Drill, Baby, Drill’ since day one — that hasn’t changed and it never will,” she said in a statement. “Since Operation Epic Fury began, President Trump has said these short-term disruptions will end once the clearly outlined objectives of the operation are achieved.”

The Trump administration is quietly pressuring oil and gas majors to uncap wells that produce relatively low volumes, but several companies are skeptical prices will remain high enough for long enough to justify spending money on those higher-cost sites, said Dan Eberhart, CEO of oil services company Canary LLC.

U.S. oil output is already near record highs, coming in at 13.65 million barrels a day in December, the last full month for which data is available. That level of production occurred even amid lower prices, as the West Texas Intermediate crude spot price averaged $65 per barrel in 2025.

Major producers have indicated they are more focused on getting the Strait of Hormuz back open than increasing production, even if the U.S. does have leverage as the world’s top producer.

“The United States is uniquely positioned to be responsive to changing market dynamics, but any production response would not happen overnight,” Dustin Meyer, senior vice president of policy, economics and regulatory affairs at the American Petroleum Institute, said in a statement. “Restoring normal traffic to the Strait of Hormuz remains essential for stabilizing global markets.”

The administration would need to offer policy assurances — such as limiting its promised withdrawals from the Strategic Petroleum Reserve — to convince companies the bottom won’t fall out on prices, Eberhart said. Companies that do put more rigs in the field would have to worry about a sharp drop in oil prices making them unprofitable.

“They really need to figure out how to get the Strait open. That’s what’s really going to solve this,” Eberhart said. “There’s not enough excess supply or policy prescriptions to completely solve this problem without opening the Strait.”

Meanwhile, some in the industry are frustrated over Trump assumptions that companies will benefit from higher prices.

While U.S. drillers struggled to sink new wells when prices fetched $60 per barrel, spiking prices will “crush the economy” and curb demand, one oil and gas refining executive said. The price signal is also not strong, stable or sustained enough to incentivize expanding production, the refining executive and the oil and gas industry official said.

Prices will continue rising if and when the Strait reopens. That’s because Middle East drillers have mothballed production — storage tanks are filling up with travel through the Strait throttled — and the time to restart operations increases with the duration of shutdowns. American tankers will also be reluctant to travel through the Strait for a long while given the geopolitical and security instability, the refining executive said.

Other oil company executives said they hadn’t gotten a call from the White House yet but are confident one is coming.

“President Trump will pull every lever he can to bring down the price of energy,” said Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, or TIPRO.

But just because Trump pulls that lever, Longanecker says, there isn’t much the domestic oil industry will be able to do.

“We’re already at record production,” he said. “I think you could see some incremental growth in production.”

The type of growth needed to make a dent in output lost in the Middle East would have to come from massive productivity gains or from completing a backlog of unfinished wells. But that backlog — wells that have been drilled but not fracked — is currently at a low ebb, Longanecker said. Companies have been returning to these wells amid low oil prices to add production for less cost.

The producers that are publicly traded companies finalized months ago their plans on how much they intend to spend on drilling new wells. Any change would be closely scrutinized by investors, who have made it clear in recent years that they want returns on investment, not just high production. Producers don’t want to spend big on new wells only to have prices suddenly drop.

U.S. rigs have nudged slightly higher since the Iran war began, hitting 553 on March 13 compared with 550 on Feb. 27, according to oil services firm Baker Hughes. The U.S. rig count is down 39 compared with the previous year.

It takes three to nine months, sometimes longer, from when a rig arrives at a well site until the first oil is produced, Longanecker noted.

“Shale development isn’t a light switch,” Longanecker said. “The industry tends to be cautious during extreme periods of market volatility, and many operators are reluctant to chase a temporary surge only to see prices retract.”

John Auers, managing director at consulting firm RBN Energy, said he would expect oil companies, especially independent ones, to ramp up production in response to higher prices. But barring a severe escalation in the war, that ramp up is unlikely to take place until after shipping has resumed in the Strait of Hormuz.

“By the time you’ve increased that production, you’ve already solved the problem,” Auers said.