Economic Strain of War Threatens Trump

The ongoing conflict between the United States and Iran has failed to rally domestic support for President Donald Trump. Instead, the war is highly unpopular among American citizens, and the sudden spike in oil prices is gradually affecting nearly every sector of the US economy. Analysts warn that, irrespective of the military outcome, the economic pressures arising from this conflict could have profound political consequences.

Despite these warnings, Trump remains defiant. He views the recent detention of Venezuelan President Nicolás Maduro as a major achievement, claiming it has not only secured control over Venezuelan oil and key mineral resources but also exerted pressure on Cuba. Limited fuel sources for Cuba could weaken the long-standing geopolitical leverage that the island nation has held over Washington since 1959.

Trump also anticipates similar successes in joint military operations with Israel against Iran. Despite missile and drone attacks from Iran on US bases in allied Arab states, he remains convinced that the United States will ultimately prevail, though he has not clarified what “victory” entails.

On social media, Trump asserted that neutralising Iran’s nuclear threat would quickly lower oil prices in the short term. He described the current price surge as “a very small price for the security and peace of the United States and the world,” dismissing critics as “fools” for viewing it differently.

Energy Market Dynamics

Trump’s confidence is partly grounded in his administration’s domestic policy achievements. Tariffs, reductions in federal employment, restrictions on migrant labour, and sustained pressure on the Federal Reserve have not created major economic upheaval. The US economy appears relatively insulated compared with other advanced nations due to increased domestic production since 2000 and growing use of natural gas, whose prices are less exposed to global market volatility.

Nevertheless, global energy volatility cannot be fully avoided. Iran’s disruption of the Strait of Hormuz has impacted European markets, and Qatar’s temporary shutdown of liquefied gas facilities has further heightened uncertainty. Domestically, the S&P 500 remains near all-time highs, which Trump cites as evidence of the US economy’s strength.

Political vs Military Challenges

Analysts contend Trump’s primary challenge is political, not military. Historically, public opposition has been the greatest obstacle to US military action. Rising fuel costs combined with war expenditures could threaten Trump’s popularity. Petrol prices have reached a post-Trump administration high of $3.50 per gallon, with diesel expected to remain above pre-war levels at least through next year. The resulting inflation will impact transportation, agriculture, retail, and air travel sectors.

The administration has taken measures to stabilise oil supply, including insuring and securing tanker shipments through the Strait of Hormuz, easing certain Russian oil sanctions, and exploring increased Venezuelan output. However, these measures may not be sufficient. Long-term stability requires either an end to hostilities or the significant degradation of Iran’s military capability to prevent future threats to key shipping routes.

Recession Risks

According to the International Energy Institute, the current Middle Eastern conflict has created one of the largest supply shocks in global oil market history. Sam Ori, Director of the Energy Policy Institute at the University of Chicago, warns that prolonged high oil prices—around $140 per barrel—could trigger recessionary pressures, though US reliance on foreign oil is now lower than in the 1970s. He cautions that any structural blockage of the Strait of Hormuz or escalation into a prolonged US-Iran conflict could further destabilise the global economy.

Trump’s statements reveal a dual approach: he demands Iran’s unconditional surrender while suggesting the war is near conclusion. Yet historical experience demonstrates that airstrikes alone rarely secure long-term victory. The Revolutionary Guards retain thousands of armed personnel capable of sustaining resistance, meaning that, for now, the conflict shows no sign of immediate resolution.

In this context, the economic burden of war may prove more consequential than battlefield outcomes. Trump may realise that removing adversarial leadership, as with Maduro, is not universally replicable and that victory in every theatre is far from guaranteed.