Trump is running out of time to bring down gasoline prices before the midterms

U.S. President Donald Trump has spent months trying to find a way out of a trap of his own making. The war against Iran, with unclear objectives and an even more uncertain outcome, has collided head-on with his path toward the midterm elections on November 3. Polls are clearly turning against his Republican Party, and voters have a simple complaint: the cost of living has continued to rise rather than fall, despite his campaign promises. The war effort has been the main catalyst for this rise.

No U.S. president has ever faced a midterm election with gasoline prices above $4 a gallon, nearly double their level at the start of the year, and diesel above $6. Barring a last-minute and unexpected change of script, Trump will be the first to do so. Although fuel prices in the United States react far more quickly than in Europe, both upward and downward, it is becoming physically impossible for the currently unlikely reopening of the Strait of Hormuz to translate into a substantial drop at the pump before the first Tuesday in November. And that is bad news, very bad news, for the tycoon’s chances of holding on to both the Senate and the House of Representatives.

The president himself began preparing the ground on Thursday. Until then, he had been predicting a sudden and immediate drop in motor fuel prices. That day, however, he acknowledged for the first time that the process would take longer. “Right after the election, oil prices are going to be tumbling downward,” he said. Moments later, he admitted: “I think it’s going to take a little bit longer than the midterm.”

In his characteristic style, Trump predicted last Wednesday that, once the war was won, crude prices would fall to between $2 and $3 a barrel, close to their historical lows. That is highly unlikely: oil is currently trading above $100 a barrel.

Risk in the Red Sea

The course of the war offers little reason to bet on that outcome. Despite Trump’s repeated insistence to the contrary, the Strait of Hormuz remains effectively sealed off. And on Friday, the Houthi rebels in Yemen, aligned with Iran, were on the verge of gaining control of another key chokepoint for global trade and energy flows: Bab el-Mandeb, the gateway to the Red Sea that controls traffic between the Indian Ocean and the Mediterranean. Hours later, Saudi Arabia, the world’s largest oil exporter, announced the closure “as a precaution” of the only pipeline that allows it to bypass Hormuz. The move can only add upward pressure to crude prices when markets reopen on Monday.

Also on Friday, as millions of Americans commemorated the victims of the September 11, 2001 attacks on their 25th anniversary, the president received another piece of bad news: inflation came in at 3.4% year-on-year in August. Wages are rising, but not fast enough to keep pace with prices. Pay increased by 3.1% in August, marking the fifth consecutive month in which wage growth lagged behind the cost of living.

Despite the remarkable, and in some ways surprising, resilience of the U.S. economy, which continues to grow and create jobs, the war in Iran and the inflation it is generating pose a twofold problem for Trump. Both his most loyal supporters and the swing voters who are more inclined to switch allegiances from one election to the next are showing growing dissatisfaction in the polls with the sharp rise in fuel prices, which is feeding through into an ever wider range of everyday consumer goods. The latest surveys suggest that only one in three Americans approves of his handling of the presidency.

The economic situation is also beginning to affect how Republican voters perceive Trump. According to a Financial Times poll, Trump’s approval rating among his own supporters has fallen two points in a month to 72%, its lowest level since he took office.

Opposition to the war

The polls also make clear that, alongside the high cost of living, the war against Iran is the issue voters are most unhappy about. All the more so because Trump returned to power promising not to drag the United States into any more endless wars; because reports have emerged showing that the human and material toll of Iranian attacks is greater than initially disclosed; and because military spending now threatens to soar. The administration’s 2027 budget proposal calls for $1.5 trillion in defense spending, the highest figure in U.S. history.

Despite these headwinds, the president has not wavered in defending both his decision to go to war and his determination to continue it. He argues that it is “the right thing to do” to prevent Tehran from acquiring a nuclear weapon. He has also insisted that he will “never” apologize for the resulting rise in prices triggered by the order to attack. At one point, he even dismissed the increase as “peanuts.”

From a purely economic standpoint, the problem is multifaceted. With public debt soaring, borrowing costs continue to climb. That, in turn, complicates the financing of the military campaign in Iran itself, which, according to estimates by the CSIS think tank, had already cost $40 billion by June.

The war is also leaving the Federal Reserve with little room to maneuver: sooner or later, it will have to raise interest rates. That is precisely the opposite of what Trump wants: he has openly called for it, brushing aside, as he often does, any notion of the central bank’s independence. Markets are already pricing in an 85% chance that the Fed’s meeting on Tuesday and Wednesday will result in the first interest-rate hike since 2023. Kevin Warsh, Trump’s own appointee and one of his most frequently praised allies, is caught between a rock and a hard place: either keep the president happy or do what economic reality demands.

The math is not on Trump’s side. If a deal on Hormuz were reached today, it would immediately push down international crude prices. However, in the best-case scenario, it would still take around eight weeks for those lower prices to be reflected consistently at gas stations across the United States.

There are two reasons for this lag. First, after the collapse of the previous ceasefire, markets would likely wait several days before treating any new agreement as credible and permanent. The price plunge Trump hopes for, and routinely exaggerates, would therefore take longer to materialize.

Second, even in such a best-case scenario, a collapse in crude prices alone would not be enough to bring gasoline and diesel prices sharply lower. Unlike previous oil crises, a significant part of today’s problem lies in refining, the stage at which crude oil is turned into fuel. And that is where timing becomes far more uncertain: Russia has nearly half of its refining capacity offline, while major questions remain about how quickly refineries in the Persian Gulf could restore full production.

“It is true that changes [up or down] in the price of oil are transmitted faster than in Europe, because the tax burden is lower. However, the window of opportunity is clearly closing,” Jorge León, vice president in charge of geopolitical analysis at Norwegian energy consultancy Rystad, explains by phone. “If there were an agreement this week, it might buy him time, but if we are realistic, it is very, very difficult. That is why he has offered the $5,000 check to every American adult if his party wins the elections.”

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