Bessent Tells Donald Trump: US Faces Risk of Rising Oil Prices if War Lasts 8-12 Weeks; Asia and Europe to Be Most Affected

Intensive risk assessments and policy discussions have been launched within the Donald Trump administration regarding the economic costs of a war with Iran. Treasury Secretary Bessent directly warned the President: if hostilities drag on for 8 to 12 weeks, the United States will face a vulnerable exposure to rising gasoline prices, while Asia and Europe will be the regions hardest hit by energy price shocks.

On April 12, according to The Wall Street Journal, people familiar with the matter revealed that Bessent had directly briefed Donald Trump on the correlation between the duration of the war and market reactions and economic trends.

The report indicated that Bessent and the President discussed measures the Treasury Department could take if hostilities continue for 8 to 12 weeks, as well as the potential vulnerability of the United States regarding rising gasoline prices. Bessent explicitly informed the President that he believes Asia and Europe will be the regions most vulnerable to energy price increases in this war.

From the perspective of market realities, economic pressures have begun to emerge: U.S. consumer prices rose 3.3% year-on-year in March, higher than the 2.4% in February; oil prices briefly broke through $100 per barrel; and gasoline prices rose above $4 per gallon.

JPMorgan Chase CEO Jamie Dimon warned in a recent letter to shareholders that if the war continues, it will trigger "significant and sustained oil and commodity price shocks," and may lead to more sticky inflation and ultimately higher interest rates.

Bessent's Core Warning: 8-12 Weeks Is the Critical Window

According to reports, Bessent and Donald Trump held a specialized discussion on the impact of the duration of the war on the U.S. economic trajectory. Both parties focused on assessing scenarios in which the conflict extends for 8 to 12 weeks and the policy tools the Treasury Department could deploy during this period.

Bessent specifically pointed out during the meeting that Asia and Europe have a higher level of exposure to rising energy prices than the United States itself. This assessment means that even if domestic gasoline prices in the U.S. are under pressure, the impact on the global energy market will be more concentrated on Asian and European economies that have a higher dependency on Middle Eastern crude oil.

The report noted that, at the same time, National Economic Council Director Kevin Hassett also provided advice to the President on the potential impact of the war on the U.S. economy, a fact confirmed by a senior government official. White House spokesperson Kush Desai stated that the administration has been working with business representatives to mitigate the impact of the war.

Last month, the Treasury Department issued a short-term authorization allowing the sale of Iranian oil already in transit at sea, which was seen as one of the temporary measures to alleviate supply pressure.

According to the report, people familiar with the matter said that the CEOs of the three major U.S. oil companies recently issued private warnings to Donald Trump administration officials, including Energy Secretary Chris Wright and Interior Secretary Doug Burgum. These executives stated that a long-term blockade of the Strait of Hormuz would severely compress the global fuel supply chain and potentially exacerbate the energy crisis.

The Strait of Hormuz is a vital channel for approximately 20% of the world's daily oil and liquefied natural gas supply. Chevron CEO Mike Wirth stated at an energy conference in Houston last month that financial markets have not yet fully recognized the severity of the obstruction to physical oil flows.

At the same conference, Wright and Burgum told oil executives that issues regarding passage through the strait would be resolved within weeks rather than months. However, according to people familiar with the matter, some executives privately expressed dissatisfaction with the government's overly optimistic statements and pointed out that the uncertainty of the conflict's outlook makes it impossible for companies to plan investments.

JPMorgan Chase CEO Jamie Dimon warned in a recent letter to shareholders that if the war continues, there will be "sustained significant oil and commodity price shocks, and a reshaping of global supply chains, which could lead to more sticky inflation and ultimately push interest rates higher."

However, not all voices are pessimistic about economic risks. Matt Coday, founder and president of the Oil and Gas Workers Association, stated that he does not believe the U.S. economy will suffer a major shock and characterized the rise in gasoline prices as "temporary fluctuations."

Agricultural Sector Sounds Alarm as Fertilizer Supplies Run Short

The economic impact of the war has extended to the U.S. agricultural sector. Agriculture Secretary Brooke Rollins recently stated during a meeting with agricultural lobby groups that she would bring the issue of rising fertilizer prices directly to the President, a situation confirmed by Caleb Ragland, chairman of the American Soybean Association, in an interview.

According to data from the American Farm Bureau Federation, approximately half of the global urea (a nitrogen-based fertilizer) supply and nearly one-third of the ammonia supply typically flow through the Strait of Hormuz. A blockade of the strait directly threatens the raw material supply for U.S. agricultural production.

"For our farmers, this is an emergency, and we need that supply channel reopened," Ragland said. He stated that the message the agricultural community is conveying to Rollins and other government officials is consistent with the stance of other economic sectors: the war should not be prolonged.