Reports say the Trump team is evaluating an extreme scenario of $200 oil prices, but the White House denies it.

According to reports, officials in the Trump administration are assessing the potential impact on the economy if oil prices surge to $200 per barrel, showing that senior government officials are already studying the economic consequences in an extreme Iran war scenario. The White House immediately denied this, calling the relevant report "false information."

On March 25, media reports cited informed sources, revealing that U.S. Treasury Secretary Besant had expressed concerns about the risk of conflict driving up oil prices and undermining economic growth even before hostilities began. Senior Treasury officials have continually voiced concerns to the White House over volatility in oil and gasoline prices in recent weeks.

White House spokesperson Kush Desai denied the above, stating officials have not specifically studied the possibility of oil prices rising to $200 per barrel, and Besant is not concerned about short-term disruption brought by "Operation Epic Fury."

Since the U.S. and Israel attacked Iran on February 28, international oil prices have surged, with WTI crude rising about 30% to $91 per barrel and Brent crude jumping nearly 40% to around $102 per barrel. The continued increase in oil prices is being transmitted to inflation, monetary policy, and global economic growth prospects, raising high vigilance in the market.

Extreme Scenario Modeling: Routine Assessment or Crisis Warning

According to reports, informed sources say Trump administration officials are conducting modeling analysis of the potential damage to economic growth prospects from sharp increases in oil prices. The sources emphasize that such modeling is part of routine crisis assessment and does not represent a forecast of future trends, with the main purpose being to ensure the government can handle various possible situations, including risks of prolonged conflict.

Reports noted. White House spokesperson Kush Desai disagreed with this characterization. He stated, although the government is indeed assessing different price scenarios and their economic impacts, officials have not specifically studied the possibility of oil prices rising to $200 per barrel. He also said that Besant has repeatedly expressed his and the administration's continued confidence in the long-term trajectory of the U.S. economy and the global energy markets.

Notably, U.S. Secretary of Energy Chris Wright said on March 12 that a jump in oil prices to $200 per barrel is "unlikely" to occur.

Reports say that oil prices at $200 per barrel would have a massive impact on the global economy. Adjusted for inflation, oil prices have only touched this level once in the past half-century, on the eve of the 2008 global financial crisis.

Even if oil prices do not reach this extreme level, projections from some institutions show that if oil prices remain at $170 per barrel for months, it will drive up inflation in the U.S. and Europe and drag down economic growth.

In the U.S., the most immediate effect is a roughly 30% increase in retail gasoline prices, erasing last year’s decline—which was once touted as a major economic achievement by the Trump administration.

Inflation and Monetary Policy: Central Banks Under Pressure

Rising oil prices are causing a chain reaction in global monetary policy.

European Central Bank President Lagarde said last week that the current hostile situation has heightened inflation risks. Central bank officials in Germany, the U.K., and Japan are preparing for possible interest rate hikes as early as next month.

In the U.S., the outlook for Federal Reserve monetary policy is becoming increasingly complex. Fed Chair Powell stated last week that it is too soon to assess the impact of surging oil prices on the U.S. economy, indicating the Fed is in a wait-and-see mode, with policy path uncertainty increasing.

Previously, Trump said he is not concerned about rising energy costs, even suggesting it could benefit the U.S. and predicting that oil prices will fall sharply after the war ends.

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