Trump administration underestimated Iran war’s impact on Strait of Hormuz

(CNN) — The Pentagon and National Security Council significantly underestimated Iran’s willingness to close the Strait of Hormuz in response to US military strikes while planning the ongoing operation, according to multiple sources familiar with the matter.

President Donald Trump’s national security team failed to fully account for the potential consequences of what some officials have described as a worst-case scenario now facing the administration, the sources said.

While key officials from the Departments of Energy and Treasury were present for some of the official planning meetings about the operation before it started, sources said, the agency analysis and forecasts that would be integral elements of the decision-making process in past administrations were secondary considerations.

Treasury Secretary Scott Bessent and Energy Secretary Chris Wright have been key players throughout the planning and execution stages of the conflict, the sources acknowledged. But Trump’s preference of leaning on a tight circle of close advisers in his national security decision making had the effect of sidelining interagency debate over the potential economic fallout if Iran were to respond to US-Israeli strikes by closing the strait.

And now it may be weeks before the administration’s efforts to alleviate the intensifying economic fallout take hold, officials said Thursday, including high-risk naval escorts of oil tankers through the strait that the Pentagon believes are currently too dangerous to conduct. The president, meanwhile, has continued to downplay the tumult in energy markets.

The reality in the strait has left diplomatic counterparts, former US economic and energy officials and industry executives who spoke with CNN in a state of confusion and disbelief.

“Planning around preventing this exact scenario — impossible as it has long seemed — has been a bedrock principle of US national security policy for decades,” a former US official who served in Republican and Democratic administrations said. “I’m dumbfounded.”

Shipping industry executives have made regular requests to the US Navy for military escorts, all of which have been rebuffed. In regular briefings for industry participants in the region, US military officials have repeatedly made clear they have not received orders to begin any escort operation and the risks to US assets remained extremely high, according to two executives with knowledge of the matter.

Bessent told Sky News’ Wilfred Frost on Thursday that those escorts would begin “as soon as it is militarily possible.”

“That was always in our planning, that there’s a chance that US Navy, or perhaps an international coalition, will be escorting oil tankers through,” he said.

But the path to this point, sources said, appears to mark the complex convergence of geopolitical assumptions, energy market forecasts and cross-cutting strategic priorities.

Top Trump officials acknowledged to lawmakers during recent classified briefings that they did not plan for the possibility of Iran closing the strait in response to strikes, according to three sources familiar with the closed-door session.

The reason, multiple sources said, was administration officials believed closing the strait would hurt Iran more than the US — a view that was bolstered by Iran’s empty threats to act in the strait after US strikes on Iranian nuclear facilities last summer.

The White House touted the administration’s planning in a statement on Thursday.

“Through a detailed planning process, the entire administration is and was prepared for any potential action taken by the terrorist Iranian regime,” spokeswoman Anna Kelly said, while touting the US military’s success.

“President Trump has been clear that any disruptions to energy are temporary and will result in a massive benefit to our country and the global economy in the long-term,” she added.

CNN has reached out to the Pentagon for comment.

Multiple current and former US officials told CNN that plans for any military action against Iran would account for the possibility of Iran closing the waterway. The US military has long maintained and updated plans to address Iranian military action in the critical corridor.

But at a moment where global oil and LNG supplies were plentiful, US oil production sat at record highs and Trump officials were basking in a pliant Venezuelan government and the potential for rapid expansion of new production from a former foe, the global scale of the downside risks was not viewed as a major consideration.

Even in weighing the potential for disruption in the strait, the administration has been far more focused on its overwhelmingly positive — if still aspirational — view of how markets would respond to eliminating the threat of Iranian disruptions entirely.

“To win in life, you’ve got to suffer short-term pain for the long-term gain, and that’s what we’re in the middle of doing right now,” Wright said in a Wednesday interview on NewsNation. “I think the American people will be thrilled with a peaceful world on the other side and more secure supplies of energy for decades to come.”

The prospect of naval escorts

On Thursday, in his first public comments since being elevated, new Iranian Supreme Leader Mojtaba Khamenei said the strait would remain closed as a “tool of pressure,” according to a statement read on his behalf on Iranian state TV.

That leaves the US with few options.

Energy executives have conveyed to administration officials they want an early end to the war, according to multiple sources familiar with the discussions. For now, they are wary of putting their assets and people at risk by running tankers through the strait and do not foresee that changing until the kinetic nature of the war slows dramatically, sources said.

Military officials have been holding daily calls and briefings with energy industry representatives for the last several days, according to sources familiar.

But from nearly the start of the conflict, US officials have told energy company representatives it was not safe enough for the Navy to conduct the escorts in the war’s early days.

A US military official told CNN that Iranian drones and missiles, followed by mines, are the chief threat facing vessels trying to cross the strait. In wargaming a possible conflict with Iran in recent years, one of the biggest risks to the US military was ships being packed tightly into the waterways in the strait, Bab-el-Mandeb and Red Sea, vulnerable to attack by Iranian missiles and drones, another source said.

Nate Swanson, a former career State Department official focused on Iran, noted that there had been military escorts of oil tankers through the strait in the 1980s, but Iran’s use of drones this time around makes it a very different situation.

Military officials have also indicated to energy industry representatives they can’t spare Navy vessels anyway, since they’re already engaged in offensive operations elsewhere. As of Wednesday, there was no precise timeline on when escorts would be available.

Wright said Thursday the Navy is unable to escort commercial vessels through the strait, though he suggested that capability could be in place later this month.

“It’ll happen relatively soon, but it can’t happen now. We’re simply not ready,” he said on CNBC. “All of our military assets right now are focused on destroying Iran’s offensive capabilities and the manufacturing industry that supplies their offensive capabilities,” he added.

Pressed on whether it’d be possible by the end of the month, he said, “I think that is quite likely the case.”

It wasn’t clear how aware Trump was of the limitations on naval escorts when he first raised the idea in a post on Truth Social on March 3. He has downplayed the risk to tankers trying to transit the strait, even though Iran has begun attacking ships in the waterway.

And while many Republicans are eager for him to refocus on domestic issues ahead of the midterms — and acknowledge Americans’ cost-of-living struggles — he struck a different tone on Thursday, suggesting there could be a benefit to higher oil prices.

“The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,” he wrote on Truth Social, without explaining who he meant by “we.”

He added that his military aims against Iran were more consequential than shifts in global energy costs.

“Of far greater interest and importance to me, as President, is stoping an evil Empire, Iran, from having Nuclear Weapons, and destroying the Middle East and, indeed, the World,” Trump wrote.

Other options to alleviate pressure

Administration officials tasked with helping alleviate the energy crisis are eager for tankers to be escorted as quickly as possible, but for now, they’re more or less on the same page about managing the crisis in phases, according to a US official and other people familiar with the matter.

Bessent announced Thursday that the Treasury Department is temporarily lifting sanctions on Russian oil stranded at sea.

And earlier in the day, the White House said it is considering easing restrictions under the Jones Act, the century-old maritime law that requires goods transported between US ports to be carried on American ships, as part of an effort that might slow the rise in gas prices.

“In the interest of national defense, the White House is considering waiving the Jones Act for a limited period of time to ensure vital energy products and agricultural necessities are flowing freely to U.S. ports,” White House press secretary Karoline Leavitt told CNN in a statement. “This action has not been finalized.”

There are a wide range of other moves that the administration could take — likely in the form of an executive order — in an effort to ease the rising prices at the pumps.

One step being considered is waiving production requirements for gasoline producers during the warm months to reduce air pollution, the sources said. (The evaporation of gasoline into the air is greater in the summer, which is why there are strict requirements then to prevent high greenhouse gas emissions.)

An executive order to reduce regulatory burdens on US gasoline producers could help to somewhat lower costs, even in the weeks after the crisis ends, sources said.

Yet the effects of such a move are unlikely to stunt the price increases in a major way, experts said.

“I think that it would be a very small potential offset compared to the factor that’s driving gasoline prices higher, which is concerns for the physical supply of refined products around the world, and also crude oil,” said Clayton Seigle, an energy expert at CSIS.

This story has been updated with additional developments.

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CNN’s Natasha Bertrand and Jennifer Hansler contributed to this report.