Donald Trump’s war in Iran has sent US petrol prices sharply higher, undermining his claims to be tackling an affordability crisis that has sapped his popularity.
Average prices for regular gasoline lurched up to $3.109 per gallon on Tuesday, higher than at the end of the Biden administration and up from $2.951 a week ago, according to motor club AAA.
The jump in prices at the pump, prompted by disruptions to global crude supplies triggered by the US-Israel attack on Iran and Tehran’s counteroffensive, comes as Trump is seeking to convince Americans that he can tame inflation with midterm elections looming in November.
“What’s happened in the last 72 hours is very inflationary,” said Gulf Oil analyst Tom Kloza. “The prices for gasoline on Easter Sunday, they’re going to be fairly high. They’ll be $3.25 to $3.50.”
Kloza added: “If you start fooling around with oil logistics and installations in Saudi Arabia, Kuwait, you’re throwing some things in the mix that we haven’t seen before.”
Gasoline prices, which are the most tangible signs of inflation for many Americans, are expected to rise further in coming days, as wholesale markets climb higher. Rbob futures have surged to $2.50 per gallon from about $2.30 at the end of last week.
Gasoline prices also vary vastly across the US — from $2.624 per gallon in Oklahoma to $4.674 in California, according to AAA data. They remain well below highs above $5 in the wake of Russia’s full-scale invasion of Ukraine in 2022 and are less than half the price of forecourt prices in the UK.
Analysts say that the prospect of a further rise in the cost of one of the essentials of most Americans’ lives will weigh on many households’ concerns over the high cost of living.
“Forty per cent of the economy is [made up of] people who are not saving and who live week to week based on salaries and other sources of income,” said Ed Morse, a senior adviser at Hartree Partners. “So, you get to $3.50 or $4 and it will certainly have an impact on a large part of the population.”
Karoline Leavitt, White House press secretary, told the FT that the administration’s policies had “led to the highest production of US oil ever with even more oil from our newfound market and agreements with Venezuela”.
Leavitt added that the Department of Energy and the Treasury “will continue to monitor oil markets and do everything possible to keep prices stable and America energy dominant”.
America’s oil production hit a historic high under Biden and has edged higher in recent months, but it is expected to fall in 2026, according to estimates from the US Energy Information Administration, a government body.
Trump is set to meet US Treasury secretary Scott Bessent and his counterpart at the energy department, Chris Wright, later on Tuesday.
The US economy is less prone to damage from an oil price shock than Europe. EIA figures show the US imported just 17 per cent of its energy in 2024 — the lowest proportion in 40 years.
Many analysts expect prices to moderate by the time Americans head for the polls in elections that will determine whether Trump’s Republican Party maintains control of the Senate and the House of Representatives.
Any rise in inflation — and dent in US consumer spending — from a prolonged period of high gasoline prices could ultimately be compensated for by the rise in profits for US energy producers.
“The United States is exporting about as much as Saudi Arabia. Doesn’t it want oil prices to go to the moon? Yeah, it’s going to hurt the guys in Chicago initially. But as soon as the guys in Texas get rich, they buy stuff from the guys in Chicago,” said Jeff Currie, chief strategy officer of energy pathways at Carlyle.
Research on the oil and gas crisis sparked by Russia’s invasion of Ukraine in 2022 showed that the gains of the boon on energy producers were not equally shared.
The wealthiest 1 per cent of the US population eventually received more than 50 per cent of energy companies’ windfall from that particular surge in prices, according to a paper published in September 2025.
“If anything [the US has] become a more powerful exporter and producer of fossil fuels since 2022. And of course, their oil majors are active globally. So I think [US shareholders] are poised to take advantage even more 1772564494,” said Gregor Semieniuk, a professor at the University of Massachusetts who was one of the authors of the research. “Wealth distributions don’t change overnight.”
If the conflict proves more prolonged than the four to five weeks Trump anticipates, the impact on gas prices would also derail the US president’s hopes of cuts to borrowing costs ahead of the midterms.
CME data show markets are now pricing in a lower chance of more than two quarter-point rate cuts to the federal funds rate, now at 3.5 to 3.75 per cent, compared with before the US and Israel’s attack on Iran.
“Higher gas prices are hitting at a time when the effects of tariffs, and sticky services inflation, are still lingering. Adding inflation at this stage — when we are five years in to inflation being above the Fed’s 2 per cent goal — is worrisome,” said Diane Swonk, chief economist at KPMG US.
“Stagflation’s not something that’s impossible at all,” Swonk added, referring to the situation where prices rise and growth falls at the same time.
