The United States is experiencing some of the highest gas prices in recent years, clearly due to President Trump’s war against Iran. Where is this all going, and what should the average American expect next? One thing seems clear: both sides are banking on winning a dangerous game of chicken centered around the Strait of Hormuz. And one seems ready to blink.
US is Feeling the Brunt of the War at the Pump
An F-35B Lightening II with Marine Fighter Attack Squadron 121, 3rd Marine Aircraft Wing out of Marine Corps Air Station Yuma, Ariz., stopped at Joint Base Elmendorf-Richardson, Alaska en route to Marine Corps Air Station Iwakuni, Japan, Jan. 12, 2017.
An F/A-18F Super Hornet, attached to Strike Fighter Squadron (VFA) 195, taxis on the flight deck of Nimitz-class aircraft carrier USS George Washington (CVN 73) while underway in the Celebes Sea, Nov. 29, 2025. George Washington is the U.S. Navy’s premier forward-deployed aircraft carrier, a long-standing symbol of the United States’ commitment to maintaining a free and open Indo-Pacific region, while operating alongside allies and partners across the U.S. Navy’s largest numbered fleet. (U.S. Navy photo by Mass Communication Specialist 2nd Class Tyler Crowley)
Based on a pre-Iran-war baseline of $2.98 per gallon on average, prices have nearly doubled, especially in states with a higher cost of living.
California and Hawaii still have the highest prices, with average per-gallon pump prices in September at $6.40 and $5.62, respectively.
Analysts estimate that American consumers have collectively shouldered about $70 billion in gas prices and about $57.3 billion in diesel since the start of the war.
However, Iran is also feeling the economic effects of its continued obstinacy in keeping the Strait of Hormuz closed.
Sitting on a Throne of Thorns
Iran may be holding a chokehold on one of the world’s busiest and most critical oil supply passages, but that does not mean the conflict has left its economy untouched.
Reports put the country’s oil reserves at close to exhaustion — part of the profits Iran makes from its sale of oil are reportedly used to fund its military and terrorism activities, which include support of Islamist extremist groups, such as the Houthis from Yemen and Hamas in Palestine.
Sanctions and restrictions on global trade enforced by the US add to Iran’s woes, with the latter’s inflation ballooning to historic highs.
The Iranian rial traded at 2.548 million rials per US dollar.
Marine Cpl. Rodger Lagrange cleans the canopy of a Marine F/A-18A+ Hornet onboard the USS Harry S. Truman (CVN 75) while the aircraft carrier operates at sea on Feb. 14, 2005. The Truman Strike Group and Carrier Air Wing 3 are conducting close air support, intelligence, surveillance, and reconnaissance missions over Iraq. Lagrange is attached to Marine Fighter Attack Squadron 115 deployed from Marine Corps Air Station Beaufort, S.C.
(DoD photo by Airman Philip V. Morrill, U.S. Navy. (Released))
The rial held its own before US blockades, but has steadily spiraled down because of US economic warfare against it.
US Treasury Secretary Scott Bessent said in August that the US’ goal was to “sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone.” Iranian officials cannot deny the sanctions’ effects, with official figures putting inflation at a whopping 83.8% in September, only slightly better than the 84.4% reported in August.
For context, US post-pandemic inflation peaked at 9.1%, and its historical high was 29.78% during the Revolutionary era in the 1700s.
Iranian Leadership Isn’t Hopeful
The Iranian Military may try to keep up a facade of invulnerability in the face of its continued response to US and Israeli attacks, but the economic face of the conflict is seemingly unable to maintain appearances.
Mohsen Paknejad, the Middle Eastern country’s oil minister, has resigned, citing “personal reasons” amid Iran’s bleak economic straits, including its dwindling oil supply.
Hamid Bovard, who heads the state-run National Iranian Oil Company, replaced Paknejad. Bovard has his work cut out for him, as US economic sanctions have completely annihilated Iran’s exporting capabilities.
At sea (Mar. 1, 2007) – Capt. Craig “Animal” Williams (front) in a F/A 18C Hornet (front) and Capt. Richard “Rhett” Butler (back) in an F/A 18C Hornet look up for a photo as they fly over USS Ronald Reagan (CVN 76). Capt. Williams, a 22-year Naval Aviator who graduated from the United States Naval Academy, was relieved as Commander, Carrier Air Wing Fourteen (CVW-14) by 21-year Naval Aviator, Capt. Butler, a graduate of the University of Kentucky during an aerial change of command ceremony. The Ronald Reagan Carrier Strike Group is currently underway in the Pacific Ocean on a surge deployment in support of U.S. military operations in the Western Pacific. Official U.S. Navy photo by Lt. Cmdr. Tam Pham
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US Touts Success of “Operation Economic Outcast”
In the face of Iran’s flailing economy, Treasury Secretary Bessent boasted of the success of the US’ economic attacks against the Islamic country, which is dubbed “Operation Economic Outcast.”
“The Iranian regime’s ability to fund its war machine and inflict terror on the world has been severely diminished thanks to Operation Economic Outcast,” Bessent said in a statement released earlier this month. “Today’s action directly targets Iran’s enablers and lays the groundwork for the United States and our partners to drain the regime’s revenue once and for all,” he added.
Iran is Feeling the Crunch Too
The US commander in chief rejected the most recent deal in late September to cease hostilities and reopen the Strait of Hormuz.
Trump credited the US’ approach to the war, implying that it had more leverage on Iran than many expected. He added that Iran was desperate to make a deal “because they’re dying.”
It remains to be seen whether Iran will try to broker peace before its economy fully collapses – experts say that while the Islamist state’s economic numbers are dire, there is nothing that indicates that the country’s government is facing instability – or if it is willing to wait out the US, its allies, and the rest of the world.
About the Author: Tim Ramos
Tim Ramos has written for various publications, corporations, and organizations, covering finance, politics, travel, entertainment, and sports in Asia and the U.S. for more than 10 years.
