US President Donald Trump is trying to downplay the effect of the Iran war on the domestic economy as American drivers are already feeling the impact on their wallets every time they fill up their cars and trucks.
During a press conference in Florida on Monday evening, Trump implicitly acknowledged the price of crude oil in the world market and the increase in the cost of gas at the US pumps by dismissing them as a temporary exit from the US-Israeli military campaign against the Iranian regime.
“In the long run, oil shipments will be more secure without the threat of Iranian ships, drones, missiles, nuclear threats or anything,” Trump said.
“We are completely eliminating this threat, and the result will be lower oil prices, lower oil and gas prices for American families.”
Trump’s promise that the war will eventually bring lower energy prices is a sign of how important the cost of living is in US politics right now, and suggests that the president is aware of the potential long-term increase in such costs on public opinion.
Dan Cassino, a polling expert and professor of government and politics at Fairleigh Dickinson University in New Jersey, says that for American voters who drive, the jump in gas prices at the pumps is tangible evidence of the rising cost of living.
“Gas prices are important because they are visceral. They are immediately experienced by almost all Americans,” Cassino told CBC News.
The national average price of a gallon of gas at the pumps reached $3.48 US on Monday, up 48 cents from last Monday, according to the auto and travel company AAA.
That’s a sharper increase than the biggest weekly increase triggered by Russia’s war against Ukraine, when the price jumped by 45 US cents a liter in March 2022.
War can have a bigger impact than fuel prices
Cassino says the political damage to Trump and his Republican party will depend on how long the tariffs last and how badly the US economy is affected as the year progresses.
The mid-term elections take place in November and if Republicans lose control of Congress, Trump will be handcuffed to continuing his agenda for the last two years of his term.
“Democrats are salivating at the thought of being able to say ‘President Trump raised gas prices to fight this war on Iran,'” Cassino said.
If the war doesn’t end soon, the economic impact will likely be felt well beyond the gas pumps. Rising travel costs can affect the price of everything from family vacations to putting food on the table.
The countries around the Persian Gulf also supply much of the world’s fertilizer, so any long-term disruption in supply due to war could disrupt agriculture and raise food prices around the world, the New York Times reported.
Iran reportedly has thousands of cheap attack aircraft, but firing each one from the sky costs the US and its allies millions. Nationally, CBC’s Eli Glasner analyzes the statistics and the problem they reveal with modern air defense techniques.
Political risk for Trump
Rising gas prices during the year put the president at risk, said Kevin Book, managing director of ClearView Energy Partners, a research and analysis firm based in Washington.
“If you go to the tap and you see a big increase in prices you might not forget it in November even if prices go down,” Book told Bloomberg. “Memory can last longer than price increases, that’s political risk.”
Brittany Martinez, executive director of Principles First, a US political organization, says that as the war drags on, it risks creating a recession that could hurt Republicans this election year.
“The real question is whether this is going to turn into a long-term conflict that voters are hearing on the domestic budget,” Martinez told CNBC this weekend.
“When energy prices rise or markets remain volatile, affordability becomes a difficult message for Republicans to get clean,” she said.
Continued uncertainty over global oil supplies due to the US-Israel war with Iran led to a volatile day in markets on Monday, as oil prices rose in the morning and then retreated later.
It is clear that the US economy has the strength to withstand further increases in energy prices.
Employment numbers have been weak all year, with the US economy creating fewer jobs in 2025 under the Trump administration than in 2024 in the last year of Joe Biden’s presidency. Inflation remains as high as it was when Trump took office.
Trump’s top political advisers have been urging him for months to emphasize economic progress — particularly on cost-of-living stabilization — in his message to American voters.
Over the weekend, key figures in the administration were trying to reassure Americans that the price shock from the Iran war is unlikely to last long.
Energy Secretary Chris Wright said the worst-case scenario for fuel price hikes is one that lasts for weeks rather than months.
“We want it back under $3 [US] gallon and it will be again before too long,” Wright told CNN on Sunday.
Manitoba farmers are facing higher fertilizer costs because of the US and Israel-Iran war. The conflict has blocked the export of nitrogen, phosphorus and sulfur – all important ingredients in fertilizers – through the Strait of Hormuz.
Trump won’t allow it
However, Trump himself risks undermining that message by underestimating the impact of war on people’s wallets.
“I knew oil prices were going to go up when I did this, and they went up almost as much as I thought they would go up,” Trump said during Monday’s news conference.
Trump, who has repeatedly bragged about low gas prices over the past year, including in his State of the Union address two weeks ago, has said he doesn’t care.
“They’re going to go down very quickly once this is over, and if they go up, they go up, but this is more important than fuel prices going up a little bit,” he told Reuters last week.
Karl Schamotta, a market strategist at Corpay, a global financial firm, says that although it is thought that the war could push the price of oil to record highs, he does not believe that Trump will allow things to happen that way before he declares victory.
“I think we’re going to see a TACO moment here at some point — a ‘Trump Always Chickens Out’ moment where we have Mr. Trump saying he’s done his job and taking all his toys home,” Schamotta told the CBC News Network on Monday.
