Trump's Iran War Drives Gas Prices Toward $4 as Economic Pain Spreads
Left says
- •Working-class Americans are bearing the immediate financial burden, with delivery drivers and commuters forced to work extra hours just to cover rising fuel costs that have jumped over $1 per gallon in some areas
- •The economic pain extends far beyond gas stations, with diesel price spikes driving up costs for trucking, shipping, and virtually all consumer goods at a time when supply chains are already stressed by tariffs
- •Trump's military adventure is creating a global economic crisis that disproportionately harms developing nations, forcing countries to shut universities, implement four-day work weeks, and ration energy supplies
- •The conflict risks triggering broader inflation and recession, with economists warning that higher energy costs will offset tax refund benefits and drag down consumer spending for months
Right says
- •Short-term energy price increases are an acceptable cost for achieving long-term strategic goals of neutralizing Iran's nuclear program, proxy funding, and regional destabilization efforts
- •America's energy independence as a net oil exporter means higher prices actually boost domestic GDP growth and benefit U.S. energy producers, unlike past Middle East conflicts
- •The administration is taking proactive steps to mitigate price impacts through strategic petroleum reserve releases, sanctions waivers, and coordinated international efforts totaling 400 million barrels
- •Current gas prices remain below historic peaks seen during previous crises, and the economic disruption will end quickly once Iran's stranglehold on the Strait of Hormuz is broken
Common Take
High Consensus- Gas prices have surged approximately 30% in three weeks, with the national average rising from around $2.90 to nearly $3.90 per gallon
- Iran's blockade of the Strait of Hormuz has disrupted roughly 20% of global oil flows, creating supply shortages worldwide
- The conflict has damaged critical energy infrastructure in Qatar and Iran, potentially affecting global natural gas and helium supplies for years
- Higher fuel costs are already forcing airlines to cut flights and creating inflationary pressure on goods transportation across the economy
The Arguments
Right argues
America's energy independence as a net oil exporter means higher prices actually boost domestic GDP growth and benefit U.S. energy producers, unlike past Middle East conflicts where price spikes were purely harmful to the economy.
Left counters
While energy producers may benefit, the broader economic damage from higher transportation costs, reduced consumer spending, and supply chain disruptions far outweighs any gains to the energy sector, especially for working-class Americans who spend a larger share of income on fuel.
Left argues
Working-class Americans are bearing immediate financial burden with delivery drivers and commuters forced to work extra hours just to cover rising fuel costs, while diesel price spikes drive up costs for virtually all consumer goods at a time when supply chains are already stressed.
Right counters
Short-term economic pain is an acceptable cost for achieving long-term strategic goals of neutralizing Iran's nuclear program and regional destabilization efforts, and current gas prices remain below historic peaks seen during previous crises.
Left argues
The conflict risks triggering broader inflation and recession, with economists warning that higher energy costs will offset tax refund benefits and drag down consumer spending for months, creating a global economic crisis that forces developing nations to shut universities and implement emergency rationing.
Right counters
The administration is taking proactive steps to mitigate price impacts through strategic petroleum reserve releases, sanctions waivers, and coordinated international efforts totaling 400 million barrels, and the economic disruption will end quickly once Iran's stranglehold on the Strait of Hormuz is broken.
Right argues
The strategic petroleum reserve releases and coordinated international response demonstrate that unlike previous oil crises, the U.S. has multiple tools to manage price volatility while achieving critical national security objectives that will provide long-term stability.
Left counters
These are temporary band-aids that don't address the fundamental problem of supply disruption through the Strait of Hormuz, and infrastructure damage to energy facilities could keep prices elevated for months or years even after the conflict ends.
Left argues
The economic pain extends far beyond gas stations, with fertilizer shortages threatening spring planting and food inflation, helium supply disruptions affecting semiconductor manufacturing, and diesel costs impacting every aspect of goods transportation when supply chains are already fragile.
Right counters
These supply chain disruptions, while challenging, are temporary consequences of breaking Iran's decades-long stranglehold on global energy markets and proxy funding networks that have destabilized the entire Middle East region.
Challenge Questions
These questions target genuine internal contradictions — meant to provoke honest reflection.
Right asks Left
“If you acknowledge that America is now a net energy exporter and that higher oil prices can boost domestic GDP, how do you reconcile your argument that this conflict is purely economically harmful when it may actually strengthen key sectors of the U.S. economy?”
Left asks Right
“If the administration's strategic objectives require neutralizing Iran's nuclear program and regional proxy networks, how can you justify ending the conflict before these goals are achieved simply to avoid temporary economic disruption, especially when similar price spikes occurred under previous administrations without lasting damage?”
Outlier Report
Left Fringe
Progressive anti-war activists like CodePink's Medea Benjamin and some Squad members who may call for immediate withdrawal regardless of strategic consequences represent roughly 15% of the left coalition.
Right Fringe
Isolationist Republicans like Senator Rand Paul and some America First commentators who oppose the Iran war despite Trump's leadership represent approximately 10% of the right coalition.
Noise Assessment
Moderate noise ratio - most discourse appears genuine concern about economic impacts rather than performative positioning, though some partisan framing of gas prices as either 'necessary sacrifice' or 'Trump's failure' amplifies beyond core sentiment.
Sources (24)
<div>Data: <a href="https://gasprices.aaa.com/" target="_blank">AAA</a>; Chart: Axios Visuals</div><p>The price of diesel fuel has surged above $5 a gallon in the U.S., the highest in four years, creating new inflationary pressure on anything Americans buy that relies on truck transport — which is to say, pretty much everything.</p><p><strong>Driving the news: </strong>The average retail price of a gallon of diesel was $5.04 Tuesday, AAA says, up from $3.65 a month ago.</p><hr /><ul><li>That amounts to a 38% one-month rise in the price of diesel, surpassing even the 30% rise in the price of regular unleaded gasoline over that span.</li><li><strong> </strong>The Iran war has choked off supplies of crude oil and other commodities from the Persian Gulf, driving up global prices.</li></ul><p><strong>State of play: </strong>Most Americans have little direct exposure to diesel prices; gasoline-fueled (and, <a href="https://www.axios.com/2026/03/10/oil-price-spikes-prices-market-shift" target="_blank">increasingly</a>, electric or hybrid) cars are the norm.</p><ul><li>Many houses, especially in the Northeast, rely on heating oil, a close chemical cousin of diesel. Thankfully, spring is arriving.</li><li>The indirect effects of higher diesel prices, however, are enormous, flowing through to essentially all goods, at a time when supply chains are already stressed by higher tariffs.</li><li>Tractor-trailers, trains and many ships rely on the fuel, so the price of bringing virtually all goods to market has risen markedly in the space of a few weeks.</li></ul><p><strong>Between the lines: </strong>That isn't likely to result in immediate price increases, but will shape the pricing decisions companies make in the weeks ahead — especially for heavy, bulky and inexpensive goods for which transportation is a large share of their total cost.</p><ul><li>That means that higher diesel prices could thus drive core inflation measures higher, not just the headline measures that include the direct cost of higher energy.</li><li>The Federal Reserve will have a harder time looking through those price hikes if they show up in core goods, as opposed to just in retail gasoline or electricity prices.</li></ul>
<p>Countries across South Asia are imposing emergency measures like rationing energy, closing universities, cutting short workweeks and even changing the way crematoriums work to deal with the fallout from <a href="https://www.axios.com/2026/03/09/iran-war-oil-economy-blowback-prices-us" target="_blank">the Iran war</a>.</p><p><strong>Why it matters: </strong>Yes, the war is raising gas prices for Americans and causing a political headache for President Donald Trump — but it's also creating a deeper crisis abroad that governments and businesses are scrambling to manage.</p><hr /><p><strong>The big picture: </strong>It's the latest global economic shock in a turbulent decade.</p><ul><li>The 2020s have seen a pandemic, Russia's invasion of Ukraine and the resulting inflation, and, more recently, Trump's "Liberation Day" tariffs, which rocked markets and panicked some countries.</li></ul><p><strong>Between the lines: </strong>The laws of supply and demand make the math fairly straightforward here: 20% of the world's oil and other energy products go through the Strait of Hormuz, and Iran has effectively shuttered traffic.</p><ul><li>When supply drops sharply and demand doesn't change, prices go up and shortages result. </li><li>Governments do what they can to manage both supply (tapping oil reserves or restricting exports), as well as demand — price controls, restrictions on working hours and even shutting down businesses to conserve energy.</li><li>The disruption isn't only about oil. Other crucial related products pass through the strait, including diesel, jet fuel and liquefied petroleum gas, used for heating and cooking.</li></ul><p><strong>By the numbers: </strong>More than 80% of the oil and petroleum products moving through the strait went to <a href="https://www.eia.gov/todayinenergy/detail.php?id=65504" target="_blank">Asia in 2024</a>.</p><ul><li>By the end of this week, "we expect crude supply cuts to approach 12 million barrels a day, making the deficit highly visible across physical markets," JPMorgan commodities analysts wrote in a note last week.</li><li>The only way markets can deal with this shortfall is a "comparable reduction in consumption." </li></ul><p><strong>Here are </strong>some of the steps being taken now: </p><ul><li>Bangladesh <a href="https://www.reuters.com/business/energy/bangladesh-shuts-universities-early-save-power-amid-energy-crisis-2026-03-09/" target="_blank">closed public and private universities</a>.</li><li>South Korea capped <a href="https://www.wsj.com/livecoverage/us-israel-iran-war-news-2026/card/J07KHLPCrfbV7OIG9BYz?gaa_at=eafs&gaa_n=AWEtsqf75_Ll27wQrLaGG-YP79Wysje1qb5rrrpjlwV1hTPwBdZFfqceamZ-vwOVxMA%3D&gaa_ts=69b85d70&gaa_sig=4BNbIPRMEP8ZgQc30MBqZOsGRHwwhTNDTbH8URUnZx7MmC2S5HJVSjbi400ZlpU1j6Cd4HBtuDievfXgYPsilQ%3D%3D" target="_blank">gas prices</a> for the first time in nearly three decades. </li><li>Thailand is encouraging <a href="https://www.bloomberg.com/news/articles/2026-03-10/thailand-orders-work-from-home-for-state-agencies-to-save-fuel" target="_blank">work from home</a>. </li><li>Some local governments in the <a href="https://asia.nikkei.com/economy/philippine-government-starts-four-day-workweek-as-energy-prices-bite" target="_blank">Philippines</a> ordered civil servants to work <a href="https://asia.nikkei.com/economy/philippine-government-starts-four-day-workweek-as-energy-prices-bite" target="_blank">four days a week</a>.</li><li>Pakistan has shut schools, mandated a four-day workweek for some government offices and raised gas prices, the <a href="https://www.ft.com/content/d3fc82a6-abf3-4ab9-ab03-09aea1407d5e?accessToken=zwAGTSltnMNgkdPT_IKmq_NKudOrAwmuoUB9Xg.MEYCIQD74w9jPQXBOlrgR_4Zr-cETOmsJlr2Cy8wCW4t36hehAIhAPiMyzTNPnXxZGfdc5QqSUQ1awBHy4k1gyqzJsOCFFYb&sharetype=gift&token=e18a217d-fcb7-44d3-b75f-3d0751ff5386" target="_blank">Financial Times</a> reports.</li></ul><p><strong>Zoom in: </strong>India is already struggling with shortages and hoarding. "The world's most populous nation is awash with reports of hoarding, theft and price gouging as citizens rush to secure supplies of increasingly scarce cylinders of liquefied petroleum gas," the <a href="https://www.ft.com/content/d3fc82a6-abf3-4ab9-ab03-09aea1407d5e?accessToken=zwAGTSltnMNgkdPT_IKmq_NKudOrAwmuoUB9Xg.MEYCIQD74w9jPQXBOlrgR_4Zr-cETOmsJlr2Cy8wCW4t36hehAIhAPiMyzTNPnXxZGfdc5QqSUQ1awBHy4k1gyqzJsOCFFYb&sharetype=gift&token=e18a217d-fcb7-44d3-b75f-3d0751ff5386" target="_blank">Financial Times</a> reports.</p><ul><li>Hotels in Mumbai are shutting down. "It is like a second COVID-19 lockdown for us," the chairman of a popular restaurant chain told <a href="https://www.firstpost.com/explainers/india-lpg-shortage-restaurants-auto-laundry-affected-iran-war-13988314.html?utm_source=twitter&utm_medium=social" target="_blank">Indian Express</a>.</li><li>Pune, a city in <a href="https://economictimes.indiatimes.com/industry/energy/oil-gas/west-asia-crisis-pune-gas-crematoriums-shut-temporarily-amid-lng-restrictions/articleshow/129306252.cms?from=mdr" target="_blank">India</a>, temporarily suspended gas-based cremations because of restrictions on the use of liquefied petroleum gas, asking customers to use wood or electricity.</li></ul><p><strong>Zoom out: </strong>The countries and regions that rely on imports for energy are in the tightest spots. </p><ul><li>While Asia's impacts are most acute, Europe is also facing the prospect of rising gas prices, which would raise electricity costs. The EU is <a href="https://www.reuters.com/sustainability/boards-policy-regulation/return-russian-fuels-would-be-strategic-blunder-von-der-leyen-says-2026-03-11/" target="_blank">considering a gas price cap </a>and other measures. </li><li>Japan this week started its largest-ever oil release from its national reserves — and effectively <a href="https://www.japantimes.co.jp/business/2026/03/16/economy/oil-release-japan/" target="_blank">capped prices</a>.</li></ul><p><strong>The intrigue:</strong> China might benefit from this crisis long-term. It has a huge oil reserve and can shift to using coal for some production.</p><ul><li>High oil prices, meanwhile, will be a boon for its renewable energy industry.<strong> </strong></li></ul><p><strong>The bottom line: </strong>"We are victims of a war that is not of our choosing," Philippines President Ferdinand R. Marcos Jr. said in a statement last week.</p><ul><li>When America sneezes, the world catches the flu.</li></ul><p><em>--Rebecca Falconer contributed reporting.</em></p>
<p>Oil prices rose over $3 per barrel Sunday in the first major trading since <a href="https://www.axios.com/2026/03/13/iran-strike-trump-us" target="_blank">President Trump's threat</a> to strike Iran's main oil export hub unless Tehran allows tankers through the Strait of Hormuz — and they remained somewhat volatile into Monday.</p><p><strong>Why it matters: </strong>The climb shortly after the markets' opening signals that traders see no major near-term market loosening or end to a conflict that has brought an unprecedented throttling of <a href="https://www.axios.com/energy-climate/oil-companies" target="_blank">oil</a> flows.</p><hr /><ul><li>U.S. gasoline, diesel and home fuel oil prices are slated to see continued increases.</li></ul><p><strong>Driving the news:</strong> The global benchmark Brent crude jumped to over $106 per barrel, over $3 above Friday's close.</p><ul><li>It's up about 45% since the U.S. strikes began.</li><li>Average U.S. regular gasoline prices are $3.70 per gallon on Sunday, up roughly 70 cents during the war, per AAA.</li></ul><p><strong>The latest: </strong>After paring some of the gains, Brent crude was at over $104 per barrel early Monday.</p><p><strong>Friction point: </strong>Trump said Friday that the U.S. hit military targets on <a href="https://www.axios.com/world/iran" target="_blank">Iran's </a>Kharg Island, the origin point for almost all Iranian oil exports.</p><ul><li>He said on social media that the attacks intentionally avoided oil infrastructure.</li><li>But Trump added that if Iran interferes with "free and safe passage of ships," he would "immediately reconsider this decision."</li></ul><p><strong>Catch up quick: </strong>U.S. officials have been seeking to ease the crunch, though analysts say what has been proposed amounts to Band-Aids until there's safe passage through <a href="https://www.axios.com/2026/03/12/oil-prices-iran-strait-of-hormuz" target="_blank">the strait.</a> It handles about a fifth of global oil flows.</p><ul><li>The Treasury Department last week <a href="https://x.com/SecScottBessent/status/2032240591442960393" target="_blank">announced</a> a broad, but temporary, waiver of sanctions on Russian oil currently in tankers.</li><li>Also last week, the Energy Department announced plans to release 172 million barrels of crude from the Strategic Petroleum Reserve over a roughly 120-day span.</li><li>It's part of a wider, <a href="https://www.axios.com/2026/03/11/iea-oil-reserve-release-iran-war" target="_blank">400-million-barrel release</a> of crude and petroleum products from multiple nations coordinated through the International Energy Agency.</li></ul><p><strong>What they're saying: </strong>Energy Secretary <a href="https://www.axios.com/2026/03/15/trump-gas-prices-iran-chris-wright" target="_blank">Chris Wright</a>, appearing on Sunday talk shows, predicted the conflict would end within several weeks.</p><ul><li>"We'll see a rebound in supplies, and a pushing down of prices after that," Wright said on ABC's "This Week."</li><li>But Wright cautioned that there are "no guarantees in wars." And he acknowledged the possibility of consumer prices getting significantly higher.</li><li>"We had $5 gasoline in the middle of the Biden administration," he said. "We hope we don't get there this time, but at least this increase in gasoline prices is for something that's going to change the geopolitical situation in the world forever."</li></ul><p><strong>What we're watching:</strong> Plans for U.S. military escorts of tankers, perhaps with other nations.</p><ul><li><a href="https://truthsocial.com/%40realDonaldTrump/posts/116227904143399817" target="_blank">Trump</a> and other U.S officials <a href="https://www.axios.com/2026/03/13/iran-war-trump-officials-ship-escorts-hormuz-strait" target="_blank">said in recent days</a> that this could occur soon, but haven't given a precise timeframe.</li><li>The Wall Street Journal, citing anonymous U.S. officials, <a href="https://www.wsj.com/livecoverage/us-israel-iran-war-news-2026/card/exclusive-trump-administration-plans-to-announce-coalition-to-escort-ships-through-strait-of-hormuz-YBtXVBjxeLjL6yAqEWJV" target="_blank">reported</a> Sunday that multiple countries could unveil a coalition effort this week.</li><li>"They are still discussing, however, whether those operations would begin before or after hostilities end," the paper reported. The White House didn't immediately provide comment.</li></ul><p><strong>More from Axios:</strong></p><ul><li><a href="https://www.axios.com/2026/03/15/iran-war-ai-oil-prices-economy" target="_blank">The Iran war is a new test of America's economic superpower</a></li><li><a href="https://www.axios.com/2026/03/13/iran-war-mines-strait-of-hormuz" target="_blank">How Iran mining the Strait of Hormuz could threaten the world</a></li><li><a href="https://www.axios.com/2026/03/13/venezuela-iran-war-trump" target="_blank">Scoop: Trump eases Venezuela sanctions on oil, fertilizer to blunt Iran war costs</a></li></ul><p><em>Editor's note: This article has been updated with details of oil prices early Monday.</em></p>
<p>If you predicted the U.S. would fall into recession due to <a href="https://www.axios.com/economy" target="_blank">the latest headlines</a>, the last few years have made you look dumb. Through interest rate increases, armed conflict in Europe and a trade war, it has proven stunningly resilient.</p><p><strong>The big picture: </strong>America's economic superpower has been its scale, diversity and adaptability that have allowed it to continue chugging along whenever crises arise.</p><ul><li>Now, the Iran war will test again how much the U.S. economy can absorb without a meaningful downturn.</li></ul><hr /><p><strong>State of play: </strong>With Iran threatening attacks on ships that pass through <a href="https://www.axios.com/2026/03/12/oil-prices-iran-strait-of-hormuz" target="_blank">the Strait of Hormuz</a>, the price of oil is up 43% this month, at over $103 a barrel at Friday's close.</p><ul><li>Middle East exports of other key commodities, including the raw ingredients for fertilizer, are also being throttled, threatening future <a href="https://www.axios.com/2026/03/13/iran-war-food-inflation-trump-midterms" target="_blank">food inflation</a>.</li></ul><p><strong>Zoom out: </strong>Based on all the historic measures, all the hand-wringing, all the chaos, the economy should be tanking or tormented. Yet it keeps snapping back, even growing.</p><ul><li>In Trump 2.0, the global trade order has been upended, the independence of America's central bank has been put in doubt and an AI boom has erupted that threatens millions of jobs.</li><li>Yet the economy has kept growing throughout, with the unemployment rate a manageable 4.4% last month. It was higher than that in 72% of months dating back to the 1940s.</li><li>New revisions released Friday showed soft GDP growth at the end of 2025, but it is on track to rise at a 2.7% rate in Q1, per the Atlanta Fed.</li></ul><p><strong>Flashback: </strong>Earlier this decade, the Federal Reserve raised interest rates repeatedly, which had many analysts predicting recession. The war in Ukraine created deep stress in global commodity markets.</p><ul><li>Before that, the 2010s were full of warnings that this or that — fear of a fiscal crisis or the Eurozone debt crisis or feckless policy — might create a downturn.</li><li>The exception proves the rule: It took a global pandemic to generate the only recession of the last 17 years, and that was the shortest one on record.</li></ul><p><strong>This all reflects the inherent strength</strong> and adaptability of the U.S. economy that becomes most evident at moments of strain.</p><ul><li>The U.S. is now a net oil exporter, which wasn't true during major Middle East wars of the past. So while the surge in energy prices is bad news for Americans buying gasoline or paying electric bills, it may actually raise GDP growth.</li><li>Last April, there were widespread predictions of <a href="https://www.axios.com/2025/04/02/trump-reciprocal-tariffs-cause-recession" target="_blank">a recession</a> and high inflation due to new tariffs. But President Trump backed off on some of the most extreme levies, and importers have proven creative about rerouting supply chains and absorbing costs, limiting the negative effects.</li><li>Even as the president has tried to command the Federal Reserve to slash interest rates, its leaders and the courts have so far stood in the way — including with a decisive federal judge's ruling in favor of Fed chair Jerome Powell on Friday.</li><li>The bond market continues to reward the U.S. with low borrowing costs: 4.28% for 10-year Treasury notes as of Friday. That wouldn't happen if investors believed a banana republic-style economic regime was on the way.</li></ul><p><strong>Zoom in: </strong>There are more subtle ways that the U.S. role in the global economy and financial system has contributed to its resilience.</p><ul><li>Global investors who want to bet on the AI revolution have little choice but to buy shares of U.S. companies — and those hundreds of billions of dollars are being deployed in the construction of data centers. </li><li>Growth is being propelled in part by the Trump administration's tax cut legislation enacted last year. It widened fiscal deficits, yet interest rates have fallen since it was passed.</li><li>That reflects deep global demand for Treasury securities, in turn tied to the centrality of the dollar as the global reserve currency.</li></ul><p><strong>What they're saying: "</strong>If there is one lesson from the past few years, this past week especially, [it] is that true energy independence means freedom from the vacillations from global markets," Ben Harris, head of economic studies at the Brookings Institution and a former Treasury Department official, tells Axios.</p><ul><li>"When you have a massive economy, with so much wealth, so much diversification, it's hard to disrupt it." </li></ul><p><strong>Reality check: </strong>None of this means that Americans are thrilled with the state of the economy. Consumer sentiment surveys point to the kind of pessimism usually seen during recessions or inflationary spikes.</p><p><strong>Between the lines: </strong>So what could go wrong? The likeliest contenders include two-sided risks from the AI surge and from geopolitics.</p><ul><li>A rapid displacement of millions of workers by generative AI would create mass unemployment, at least temporarily.</li><li>If the Iran war chokes off the shipment of oil and natural gas through the Persian Gulf for a sustained period, that could create a global recession and much higher energy prices.</li></ul><p><strong>Yes, but: </strong>The natural state of the $30 trillion U.S. economy is to maintain forward momentum. </p><ul><li>It will take more than a bunch of adverse headlines to stop it.</li></ul>
The U.S. temporarily lifted sanctions on Iranian oil already at sea as oil prices soar amid the Middle East conflict.
The average price for diesel hit $5 per gallon on Monday.
Analysts expect gas prices will remain high across the U.S., despite the International Energy Agency’s planned release of 400 million barrels of reserve oil.
Gas prices have soared to a national average of $3.67, up around 70 cents since the U.S. and Israel attacked Iran in late February.
The spike also occurred after Iran’s new supreme leader insisted the Strait of Hormuz would remain closed.
At least three ships were struck by projectiles near the Strait of Hormuz after the U.S. destroyed 16 Iranian mine-laying ships Wednesday.
Gas prices have shot up 33% in four weeks, taking a bite out of workers’ budgets and stoking inflation fears.
The morning began with the shock of Brent crude, the international standard, briefly rising above $119 per barrel, up from roughly $70 before the war with Iran began.
Markets are on a four week losing streak and getting very close to a correction, which would be a ten percent drop from recent highs. The war with Iran is driving oil and gas prices up - the economic turmoil also sending mortgage rates, which had been declining recently, higher. NBC News’ Christine Romans reports.
The U.S.-Iran war has begun cutting into discretionary spending, raising mortgage rates, battering stock markets and souring consumer sentiment.
<p>Online searches for electric and hybrid cars increase as war-linked fuel prices hit highest levels in nearly three years</p><ul><li><p><a href="https://www.theguardian.com/news/2026/feb/17/sign-up-for-the-breaking-news-us-email-to-get-newsletter-alerts-direct-to-your-inbox?utm_medium=ACQUISITIONS_STANDFIRST&utm_campaign=BN22326&utm_content=signup&utm_term=standfirst&utm_source=GUARDIAN_WEB">Sign up for the Breaking News US email to get newsletter alerts in your inbox</a></p></li></ul><p>US car buyers are showing a surge in interest in electric vehicles after <a href="https://www.theguardian.com/us-news/donaldtrump">Donald Trump</a>’s decision to attack Iran helped cause a major jump in gasoline prices.</p><p>The cost to refuel a vehicle in the US is at its highest level in nearly three years, with the average national price of gas <a href="https://gasprices.aaa.com/">standing</a> at $3.90 a gallon on Friday.</p> <a href="https://www.theguardian.com/business/2026/mar/21/us-gas-price-surge-iran-electric-cars">Continue reading...</a>
<p>Markets seem particularly attuned to increasing oil prices, with S&P 500 and Nasdaq down 1.5% and 2% respectively</p><p>US stock markets dropped again on Friday, capping off a fourth week of market turbulence as investors worried about the <a href="https://www.theguardian.com/world/us-israel-war-on-iran">US-Israel war on Iran</a> and its widespread impact on global oil prices.</p><p>The Dow lost over 400 points on Friday, with the S&P 500 slipping 1.5% and the tech-heavy Nasdaq down 2%.</p> <a href="https://www.theguardian.com/business/2026/mar/20/stock-market-dip-iran-war">Continue reading...</a>
United Airlines announced Friday it is trimming flights as rising fuel costs tied to the U.S. military operation in Iran squeeze the industry. United CEO Scott Kirby, in a memo shared to the company’s website, said the airline will cancel about “3 points of flying in off peak periods” — pointing to redeye trips and…
President Trump’s former Energy Secretary Dan Brouillette on Friday defended the White House’s ongoing military operation in Iran, even as global crude oil rates spike. Brouillette, in an appearance on NewsNation’s “The Hill,” emphasized that rising energy costs are a “short-term pain” in exchange for a “long-term gain.” “I think what the president sees here…
Strikes on infrastructure amid the Iran conflict are worsening a global energy crisis. Energy supplies were already tight and prices were soaring due to the closure of the Strait of Hormuz, a key shipping channel through which about a fifth of the world’s oil typically flows. But recent strikes on oil and gas infrastructure are…
Fox News’s Martha MacCallum pressed Interior Secretary Doug Burgum on Friday afternoon about growing concerns about rising gas prices amid the U.S. war on Iran. “I think that this is a situation where people have to understand that this is temporary, this is not permanent,” Burgum said. MacCallum asked Burgum to respond to a clip…
An overwhelming majority of Americans expect oil and gas costs to keep rising amid economic strain sparked by the U.S.-Israeli conflict with Iran, according to a new poll. The Reuters/Ipsos poll, released Friday, shows that 87 percent of Americans believe gas prices will go higher over the next month, while 11 percent say they think…
<p><a href="https://www.axios.com/2026/03/20/iran-war-end-trump-strait-hormuz" target="_blank">The Iran war</a>'s economic consequences risk <a href="https://www.axios.com/2026/03/10/iran-war-us-scenarios-trump-hegseth" target="_blank">outlasting</a> the conflict itself.</p><p><strong>Why it matters: </strong>Any swift ceasefire or arrangement allowing safe passage through the <a href="https://www.axios.com/2026/03/20/trump-winding-down-iran-war-hormuz-strait" target="_blank">Strait of Hormuz</a> won't undo supply shocks that could linger for months — and in some cases, years.</p><hr /><p><strong>What they're saying:</strong> Oil markets "have so far faced logistics disruptions, not true supply destruction," Matt Bauer, a commodity strategist at Ned Davis Research, wrote in a client note on Friday.</p><ul><li>"But attacks on <a href="https://www.axios.com/2026/03/18/israel-strikes-iran-natural-gas-infrastructure" target="_blank">South Pars</a> and Iran's retaliation raise the risk that the conflict is shifting toward physical damage of production capacity."</li></ul><p><strong>"The direct attacks </strong>on energy infrastructure illustrate the war's long-lasting consequences," says Kyle Rodda, a senior financial market analyst at Capital.com, an online trading platform.</p><ul><li>"Productive capacity will be offline for an uncomfortably long time, meaning energy prices are likely to fall much slower than they rose."</li></ul><p><strong>What's going on: </strong>The blockage of the Strait of Hormuz has already upset the global flow of commodities. Now, this week's damage to energy facilities in the Gulf could deepen that disruption. </p><ul><li>The attacks wiped out 17% of the nation's natural gas export capacity, Qatar's energy minister, Saad al-Kaabi, <a href="https://www.reuters.com/business/energy/iran-attack-damage-wipes-out-17-qatars-lng-capacity-three-five-years-qatarenergy-2026-03-19/" target="_blank">told Reuters</a>.</li><li>The damage likely means less natural gas from the region in the long-term — with nearly 13 million tons of liquefied natural gas sidelined annually for as long as five years, Kaabi said.</li></ul><p><strong>Zoom in: </strong>Here are some of the impacts from the combination of a shipping blockage and infrastructure destruction: </p><p><strong>Fertilizer.</strong> Natural gas is a key ingredient for fertilizer, and about a third of the world's seaborne fertilizer supply — and almost <a href="https://www.tfi.org/media-center/2026/03/04/tfi-strait-of-hormuz-closure-impacts-to-fertilizer/" target="_blank">half of the world's urea</a> — is transported through the Strait of Hormuz. Any fertilizer on the water can't get out. </p><ul><li>U.S. farmers who did not pre-order fertilizer might not get enough in time for spring planting, the American Farm Bureau <a href="https://apnews.com/article/iran-war-fertilizer-availability-cost-farmers-aa846fb0e30d1060d8993c65d32fe12b" target="_blank">told the AP</a> this week. That could result in lower crop yields, which would put upward pressure on grocery prices into the next year. </li><li>Higher prices for diesel — which powers agriculture equipment — already risk aggravating food inflation. </li></ul><p><strong>Helium. </strong>The damage to Qatar's natural gas facilities will also squeeze the production of an important byproduct: helium, a critical input for semiconductor manufacturers racing to keep up with AI-related demand.</p><ul><li>Qatar is the world's second-largest helium producer, behind the U.S.</li><li>"The limited supply of helium will impact Taiwan's ability to manufacture semiconductors, which we all saw back in 2021 can affect the supply of nearly every good, from cars to dishwashers," Sameera Fazili, a former economic adviser to President Biden, said on a call with reporters on Friday.</li></ul><p><strong>The intrigue</strong>: Economists across Wall Street — plus the Federal Reserve — are penciling in higher forecasts for inflation this year. Others have also marked down GDP and consumer spending expectations.</p><ul><li>It's a result of what they anticipate will be a months-long global shock from the Iran War — the effects of which the U.S. won't escape.</li></ul><p><strong>What to watch: </strong>The scale of the impact on U.S. inflation and growth in the second half of the year depend in part on the extent "there is any permanent damage to oil and gas infrastructure," economists at SMBC, a Japanese bank, wrote in a note this week. </p><ul><li>Oxford Economics, for instance, now expects that consumer spending among Americans, adjusted for inflation, will rise by 1.9% this year — which would be the slowest annual growth in 13 years outside the pandemic.</li></ul>
<p>Most Americans will likely soon be <a href="https://gasprices.aaa.com/" target="_blank">paying</a> over $4 per gallon as the <a href="https://www.axios.com/2026/03/18/israel-us-iran-war-objectives-trump-netanyahu" target="_blank">war in Iran</a> drives one of the <a href="https://www.nytimes.com/2026/03/18/upshot/gas-prices-lookup.html" target="_blank">sharpest</a> gas price surges in recent history.</p><p><strong>The big picture:</strong> For many Americans, the most visible barometer of how the Iran war is going may be the <a href="https://www.axios.com/2026/03/15/trump-gas-prices-iran-chris-wright" target="_blank">price at the gas station</a> down the street.</p><hr /><p><strong>Breaking it down: </strong>The White House insists prices will fall rapidly once Trump's military objectives in Iran are achieved.</p><ul><li>"President Trump has been clear that these are short-term disruptions. Ultimately, once the Iranian regime is neutralized, oil and gas prices will drop rapidly again, potentially even lower than before the strikes" began, White House spokesperson Taylor Rogers said in a statement.</li><li>But analysts say it could take weeks to months for prices to ease, even after the war begins to wind down. That could keep gas prices elevated into the summer.</li><li>Trump has largely dismissed the price spikes, though Vice President Vance acknowledged on Wednesday that there could be a "rough road ahead of us for the next few weeks."</li><li>If the Strait of Hormuz remains largely closed for an extended period of time, or if Iran conducts further retaliatory strikes on Gulf energy facilities, the costs could be steeper and longer-lasting.</li></ul><p><strong>Between the lines:</strong> The White House says Trump wants to decimate Iran's navy, proxy funding and nuclear and missile programs before moving to end the war.</p><ul><li>It may be difficult to convince swing voters it's worth swallowing budget-busting price increases to achieve those goals.</li><li>Iran currently has a stranglehold on the most important waterway for the global oil trade, complicating any attempt by Trump to end the conflict and get prices back to normal.</li><li>In the meantime, he is taking a variety of steps, like tapping strategic reserves and suspending the <a href="https://www.axios.com/2026/03/12/trump-jones-act-waiver-oil-prices" target="_blank">Jones Act</a>, to try to limit the pain.</li></ul><p><strong>Reality check: </strong>Prices were relatively low — below $3 on average — when the war began, so they're still below historic highs despite a more than 25% increase since the war began.</p><ul><li>Prices spiked to around $5 per gallon at the start of the war in Ukraine, for example.</li><li>But gas prices are one of the most visible and keenly felt forms of inflation, and have a disproportionate impact on lower-income households.</li></ul><p><strong>By the numbers: </strong>Majorities of Americans think gas prices are already too high (80%), that they're likely to increase in the next few months (67%), and that Trump is to blame for the increases (60%), <a href="https://www.yahoo.com/news/politics/article/poll-66-of-americans-disapprove-of-trump-on-gas-prices-as-they-feel-effects-of-iran-war-120000483.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAALsmZ55drkTRiDSuf07PzSUNRM2G5j4zBsOQue0DGHzkT2ZyIpWWqnEuhfF7rQ2jiSNlNWhTJl4pctY6s4qNf0cg9V2-tUqOJEV7ESpgqTcphCh_xxMVWccShmPmhHjmM_6G5WRzQOPd4lXqLeZMIqDB2Nc6dNKnRqhy0bf3JvCG" target="_blank">according</a> to a Yahoo/YouGov poll.</p><ul><li>Meanwhile, 56% of Americans disapprove of Trump's handling of Iran, vs. 36% who approve, according to a separate Economist/YouGov <a href="https://yougov.com/en-us/articles/54343-donald-trump-is-losing-support-from-independents-over-iran-march-13-16-2026-economist-yougov-poll" target="_blank">poll</a>. </li><li>The vast majority of Republicans continue to support the war, though, and Trump's overall approval rating appears stable.</li><li>Republicans up for election in November are hoping the price surge is over and forgotten by then.</li></ul><p><strong>The bottom line:</strong> Rising gas prices could make it harder for President Trump to convince Americans it's a fight worth having.</p>
<p>What the taxman giveth, the energy shock taketh away. That's the upshot of the arithmetic around how much the average American household is on track to pay for higher gasoline prices this year.</p><p><strong>Why it matters: </strong>Forecasters have been betting on an economic tailwind this year from super-sized tax refunds, thanks to tax legislation passed last year.</p><ul><li><a href="https://nealemahoney.substack.com/p/spiking-gasoline-prices-may-wipe" target="_blank">New calculations</a> from the Stanford Institute for Economic Policy Research, however, suggest that the benefits of higher tax refunds will be roughly offset by higher prices for crude oil and refined oil products in the wake of the Iran war.</li></ul><hr /><p><strong>By the numbers: </strong>The Stanford economists modeled the hit the average U.S. household will face if the most recent Goldman Sachs crude oil forecast — which assumes a three-week closure of the Strait of Hormuz with prices mostly retreating to pre-war levels by June — comes true.</p><ul><li>They find that in this scenario, retail gasoline prices peak at $4.36 a gallon in May before declining slowly. That would mean the average household spending $740 more in gas costs this year compared with pre-war forecasts.</li><li>That is similar to the $748 in additional refund money that the Tax Foundation projects the average household will receive due to the One Big, Beautiful Bill Act.</li><li>Other estimates of the extra refund cash flowing into Americans' bank accounts this tax season are smaller. In IRS data so far this filing season, the average refund is up only $360.</li></ul><p><strong>Reality check: </strong>Each side of this equation involves great uncertainty. The energy price outlook is a forecast, not reality, and serious forecasting shops have a range of estimates for the tax refunds.</p><ul><li>Moreover, average figures "mask substantial variation across households," note Stanford's Neale Mahoney, Jared Bernstein, Caleb Brobst and Ryan Cummings.</li><li>"Non-drivers and electric vehicle owners face no increase at the pump, while households with long commutes may face considerably higher costs," they write.</li></ul><p><strong>State of play: </strong>The oil price shock — a gallon of regular unleaded gasoline averaged $3.84 Wednesday morning, up from $2.92 a month ago — amounts to a tax on households, because most people can't radically change their energy consumption habits on short notice.</p><ul><li>People need to drive to work and the grocery store, and to heat their homes, so higher energy prices tend to either cause households to cut other spending or reduce savings rates.</li><li>Higher energy prices also raise airfares and shipping prices, which exerts upward pressure on the prices of virtually all goods.</li><li>There are some offsets in terms of overall economic growth — energy-producing companies and regions can see higher incomes amid higher oil prices — but those benefits tend to be more concentrated.</li></ul><p><strong>The bottom line: </strong>Higher energy prices "will be a meaningful drag on spending growth this year," wrote Michael Pearce, the chief U.S. economist at Oxford Economics, "more than offsetting the fiscal boost from larger tax refunds that is feeding through at the same time."</p>