US President Donald Trump has said the US war with Iran is expected to last four to five weeks, but warned it could last longer, comments that provide no clear end date for the energy and economic impacts from the war, geopolitical risk analysts said.

“Right from the beginning, we projected four to five weeks, but we have the capability to go far longer than that,” Trump said during a March 2 Medal of Honor ceremony. “We are already substantially ahead of our time projections. But whatever the time is, it’s okay.”

The war between US-Israel and Iran lifted crude prices on March 2, with NYMEX April crude settling $4.21 higher at $71.23/barrel.

Administration officials on March 2 said the White House remained focused on maintaining lower prices despite the conflict. US Secretary of State Marco Rubio said the administration would roll out a program led by Energy Secretary Chris Wright and Treasury Secretary Scott Bessent, designed to “mitigate” the impacts of any supply disruption.

Crude vessel traffic remained nearly halted in the Strait of Hormuz on March 2. Around one-fifth of the world’s crude oil is shipped through the Strait of Hormuz, which lies just off the coast of Iran.

“Obviously, markets are going to be reacting to news about what’s happening,” Rubio said. “And again, a reminder, think about it, this terroristic regime, led by radical clerics, has the potential to shut off 20% of global energy. That’s the kind of leverage they have because of their navy. … There is a plan in place. We anticipated this could be an issue, and Sec Wright and Bessent will begin to roll out those steps starting tomorrow to mitigate against the impact that could have.”

Rubio did not elaborate on the program’s details. A Department of Energy spokesperson did not respond to requests for comment on whether the administration would consider releasing crude from the Strategic Petroleum Reserve.

Price sensitivity

Clayton Seigle, senior fellow at the Center for Strategic and International Studies, said there seems to be a discrepancy between the potential setup for triple-digit oil prices and very high natural gas prices, and Trump’s track record of being sensitive to high oil prices, high fuel prices and inflation.

There is also a disconnect between the relatively small price increase for oil prices so far in this war compared with the start of the Russia-Ukraine war, Seigle said during a webinar hosted by CSIS. In 2022, when the oil market was anticipating 5 million b/d of oil Russian oil going offline, oil prices went up to $130/b for crude and $5/gallon for US gasoline, he said.

“Either the traders and the administration know something that we don’t on the analyst side — that the situation is more benign than we are expecting — or we could be sleepwalking into triple-digit oil prices pretty soon,” he said.

Colby Connelly, a senior fellow at the Middle East Institute, said the war will have a negative impact on inflation. Prices already were rising before the war simply because oil had been trading in the $70-72/b range due to tensions in the region, he said during a March 2 webinar.

If there are any actual supply outages over the next week because of shut-ins or because of any kind of physical disruption, prices will easily be north of $80 per barrel, Connelly said.

“We think that there is a potential $40 or so of upside right now, depending on how bad things could get,” he said.

If there is massive upheaval and change inside Iran, the loss of 3.2 million b/d of Iranian output would have an impact as well, he said.

“That, in a way, might be the most sustained outage that you could see in the region,” Connelly said. “But that’s a political outcome, it’s not so much a market prediction.”

Production signal

Ahead of the attacks, Trump touted his policies to boost US energy production. Speaking at a Feb. 28 event at the Port of Corpus Christi in Texas, Trump said that since his inauguration, oil production has gone up by 600,000 b/d, natural gas production is at an all-time high, and the price of gasoline in Corpus Christi is down to $2.30/gal.

In its February Short Term Energy Outlook, the US Energy Information Administration forecast US crude oil production holding steady at 13.6 million b/d in 2026, followed by a decline to 13.3 million b/d in 2027. The US oil and gas rig count dropped by five to 568 for the week ended Feb. 18, with a year-over-year decline of 41 rigs since Feb. 2025.

Many domestic producers have focused on cost savings and efficiency drives throughout 2025, with the potential for softening fundamentals outweighing the upside from geopolitical risk.

“I think we’re still a little bit cautious about 2026,” Occidental CEO Vicki Hollub told investors during a Q4 earnings call. “You look at the fundamentals, and there are going to be these scenarios where prices get driven up by things that are happening geopolitically, but we don’t believe those are sustainable. Whether they get resolved within days or go on for months, we don’t know, but we’re prepared to assume that the fundamentals don’t support where prices are right now.”

Despite industry perceptions of ample supply fundamentals, risk experts cautioned against assumptions of price stability,

“Risk premia could persist if acute wartime threats give way to more chronic perils that might come with regime change,” ClearView Energy Partners wrote in a client note. “Moreover, belligerent statements from regional players asserting their rights to ‘self-defense’ make escalation look more likely than stand-down at this juncture.”

“The Strait matters, but so do production facilities that export the oil and gas that pass through it,” the analysts said. “An expanding war has potential to damage energy infrastructure, both deliberately and coincidentally.”

In the longer term, it remains unclear whether the US will be able to negotiate an acceptable end to the conflict, or exactly who in Iran will marshal enough power to ensure the conditions of a ceasefire are met, Max Boot, senior fellow for security studies at the Council on Foreign Relations, said March 2.

“It’s hard to imagine that there is going to be one individual who’s going to be strong enough to make major concessions that the Supreme Leader was not willing to make,” Boot said during a CFR event. That scenario is one of the more moderate possibilities, Boot said, with full-scale regime change and even a chaotic democratic uprising among other possibilities that could cut off Iranian supply.

Steven Cook, CFR senior fellow for Middle East and Africa studies, said a larger risk — a wider Iranian response — could worsen immediate market impacts and fuel uncertainty long after the current conflict is resolved.

“The market response, whether it’s rational or irrational, one of the things we should all be concerned about is an asymmetric Iranian response,” Cook said. “Certainly, they have sought to widen the war in this opening phase. … Sometimes there is a terrorist response, and sometimes it is delayed.”
Source: Platts