‘If they rise, they rise’

By Steve Holland, Jarrett Renshaw, Nandita Bose and Bo Erickson

WASHINGTON, March 5 (Reuters) – President Donald Trump said on Thursday he was not worried about rising U.S. gas prices due to the widening Iran conflict, saying in an exclusive interview with Reuters that U.S. military action was his priority.

“I don’t have any concerns about that,” he said when asked about high prices at the pump. “Once this is over, they’re going to go down very quickly, and if they go up, they’ll go up, but that’s a lot more important than gas prices going up a little bit.”

The comments mark a change in tone for the president, who touted a drop in gas prices in his State of the Union address last month and at an energy-focused Texas rally that took place just hours before the U.S. launched airstrikes on Saturday.

Political analysts say a sustained increase in gas prices could hurt Republicans in November’s midterm elections, when control of the U.S. Congress will be at stake. Voters are already unhappy with the high cost of living and Trump’s handling of the economy.

Despite public efforts to downplay Trump’s price increases, White House Chief of Staff Susie Wiles and Energy Secretary Chris Wright are meeting with oil CEOs to consider possible options to combat rising energy prices, White House press secretary Karoline Leavitt said Thursday.

Another White House official, speaking on condition of anonymity, said there was a scramble between the White House energy and national security teams to develop measures aimed at lowering gas prices.

The official said Wiles had warned at White House meetings that failure to act on price increases would be a “disaster” for Republicans in the election.

Trump has set a four- to five-week timeline for military action against Iran, but political and military experts have questioned this, noting that the U.S. government has yet to articulate its ultimate goal as the conflict continues to spread throughout the region and beyond.

In the interview, Trump said he had no plans to tap the Strategic Petroleum Reserve, the world’s largest emergency stockpile of crude oil, and that he was confident the Strait of Hormuz, a critical conduit for oil transportation near Iran, would remain open because Iran’s navy was “at the bottom of the sea.”

Global oil prices have risen 16% since Saturday, when the war began, as the spreading conflict disrupted supplies in the Middle East.

The national average cost of gasoline has risen 27 cents since last week to $3.25 per gallon, according to AAA, a U.S. travel organization that tracks fuel prices. The current national average is 15 cents higher than a year ago.

Trump said costs “haven’t increased by much.”

WHITE HOUSE BETTING FOR SHORT CAMPAIGN

The White House is betting that the conflict with Iran and the resulting pain at the gas pump will be short-lived.

White House energy advisers told Trump aides that the initial sticker shock in fuel markets was less severe than many feared and asked for patience, according to two people granted anonymity to describe internal discussions.

Advisers have warned that any intervention by the Trump administration that fails to quickly reduce prices could rattle markets and be counterproductive.

Secretary of State Marco Rubio said earlier this week that the administration was introducing a package of measures to combat rising energy prices, but the only plans announced so far are the promise of U.S.-backed risk insurance for oil tankers and potential naval escort through the Strait of Hormuz.

Three energy executives told Reuters the White House has few options to bring down energy prices.

“When you look at the menu of policy options at home and abroad, they can be helpful, but they don’t move the needle very far,” said one energy executive, who spoke on the condition of anonymity to speak candidly about the administration’s policies. “I think the main focus is to do everything they can to restore passage through the Strait of Hormuz.”

Officials are also discussing a wide range of other options, including a federal gasoline tax holiday and loosening environmental regulations that would allow higher ethanol blends on summer gasoline, according to two sources familiar with internal deliberations.

Sources said officials were also considering a possible outflow of oil from the Strategic Petroleum Reserve, but the President ruled out that option – at least for now – in comments to Reuters.

Republican leaders in Congress, such as House Speaker Mike Johnson, also dismissed concerns about rising gas prices as the party plans to focus its midterm election strategy on economic successes.

(Reporting by Steve Holland, additional reporting by Bo Erickson, Nandita Bose and Jarrett Renshaw, Editing by Ross Colvin and Nia Williams)