Iran War Takes Another Bite Out Of Americans’ Wallets

Americans won’t be getting a break from stinging prices at the pump anytime soon as President Donald Trump moves to escalate the Iran War.

Americans should expect an immediate and direct impact on gas prices in the U.S. as a result of the continued escalation in the Iran War, economists told the Daily Caller News Foundation. The U.S. military has struck Iranian territory in recent days, and Tehran’s military has retaliated with strikes across the Gulf Arab states.

Diesel and regular unleaded fuel prices are up roughly 7 cents from a week ago, according to AAA.

“So far, governments and markets have managed through the Iran conflict and disruptions to oil flows through the Strait of Hormuz by curtailing demand, drawing down government-held and commercial inventories, and, where possible, incrementally increasing production,” Mariam Al-Shamma, a director at the Bipartisan Policy Center, told the DCNF. “They’ve also turned to alternative energy sources like coal to make up for some of the supply gap. However, emergency reserves of oil and ready alternatives are finite. At some point, if disruptions to oil trade persist, the supply crunch will intensify, leading to much more dramatic price spikes than what we’ve seen so far.”

The Iran War will likely impact gas prices long after its completion.

“Damage to energy infrastructure and assets could also mean that effects last well beyond any cessation in hostilities,” Al-Shamma, told the DCNF. “Depending on the scale of any damages, lower oil production and export capacity in the near term means that global supply could remain constrained, potentially resulting in sustained higher crude and refined product prices. This will also challenge governments’ and companies’ ability to refill stockpiles, and in turn their resiliency in the face of future supply shocks.”

“As the world knows, President Trump’s first preference is always peace and diplomacy; however, Iran has chosen the path of violence, and they are reaping the consequences. President Trump will never allow Iran to have a nuclear weapon and will continue advancing America’s national security interests,” White House spokeswoman Olivia Wales told the DCNF. “At the same time, the President is committed to implementing his proven economic agenda of tax cuts, deregulation, and energy abundance on the home front to lower costs for working families. As the Iranian terror threat is fully neutralized, Americans will again see cooling inflation, gas prices at multi-year lows, and accelerated economic growth.”

Running Out Of Juice

As emergency stockpiles of oil, such as the U.S. Strategic Petroleum Reserve, continue to dwindle, secondary issues such as infrastructure integrity have become a new concern.

“The U.S. SPR [Strategic Petroleum Reserve] is reaching critically low levels now that threaten the operational integrity and infrastructure of its underground caverns and transmission lines,” energy public policy analyst David Blackmon told the DCNF. “The DOE will have to make some hard choices about whether it can safely continue these large withdrawals in the near future.”

The U.S. SPR infrastructure is currently aging and in need of repairs, according to the U.S. Government Accountability Office.

“Thanks to the U.S. military and President Trump, oil is moving through the Strait of Hormuz. Yesterday, 8.5 million barrels of oil transited through the Strait, consistent with the recent average,” a Department of Energy spokesperson told the DCNF. “This puts the Arabian Gulf Region flows at about 15 million barrels per day. The U.S. military will ensure oil flows continue, with or without the Iranians, to keep markets well supplied.”

The U.S. Energy Information Administration (EIA) says that the current U.S. Strategic Petroleum Reserve balance is roughly 319 million barrels, as of the week ending July 3, 2026. This is the lowest level of oil in the reserve since 1983, according to the EIA data.

Not all experts that the DCNF contacted were pessimistic about the economic outlook on the results of the Iran War.

“Iran’s capabilities have been so profoundly degraded that a broader escalation in the Gulf is unlikely. Recent attacks seem to be driven by disorder and competition within the regime’s leadership, as well as a propaganda effort to project strength,” Jacob Olidort, chief research officer and director of American Security at the America First Policy Institute, told the DCNF. “The United States and its partners are securing the Strait of Hormuz and expanding alternative energy routes, sharply limiting Iran’s ability to disrupt global markets. Continued military and economic pressure, backed by coordinated action with our allies, will stabilize oil markets and protect the trade route.”

Another issue affecting the global oil supply chain is the storage capacity of oil production facilities. Oil constantly flows from wells and must be stored.

If oil producers run out of storage for their crude oil, they may be forced to shut down the wells. Experts previously told the DCNF that many of these wells may not be able to be restarted after they are shut down, due to their age and pressures

“When the takeaway capacity disappears, the operator has little choice but to close the valve,” Steve Hanke, a professor of applied economics at Johns Hopkins University and has been analyzing OPEC since the ’80s, previously told the DCNF. “The strongest wells can be returned to service within days, while most require weeks or months of intervention. Marginal wells often require years, and some never return at all. Following the 2020 [COVID-19] episode, a portion of restoration work waited as long as two years simply because qualified service crews were unavailable.”

Old data from JP Morgan reported by Bloomberg suggested that countries in the Persian Gulf could have run out of oil storage months ago, as early as May 8, 2026. However, the blockades in the Persian Gulf have repeatedly started and stopped throughout the Iran War, so it remains unclear what capacity the oil storage facilities currently retain.

The oil well shutdowns that were previously predicted by the experts in the DCNF reporting from April have become a reality, as many wells have been shut down since this reporting. More than 14 million barrels per day of oil production is now shut down as of May 2026, according to the International Energy Agency (IEA).

The IEA forecast 2026 global oil demand at 104 million barrels per day in its May 2026 report. The loss of oil production in the May report makes up nearly 14% of global oil demand.

The IEA June 2026 report optimistically predicted that an upcoming deal with the Iranian government would allow this production to resume; however, recent escalations in the conflict have proven this prediction to be inaccurate.

“Obviously, all of these factors discussed here have placed upwards pressure on prices not just for energy but for all consumer goods,” Blackmon told the DCNF. “That pressure has been mitigated by smart government actions and development of alternative transportation routes out of the Persian Gulf region, but the upwards pressure will remain in place for as long as this conflict endures.”

Economists previously told the DCNF in April that if blockades on the Strait of Hormuz were to continue, famines in Asia and Africa would likely occur during next year’s harvest season.

Famine On The Horizon?

Several months later, the war continues, and multiple blockades have repeatedly disrupted the global shipment of fertilizer; at this point, these famines will likely become a reality next year, multiple experts told the DCNF.

“Nitrogen [fertilizer] in general and fuel both spiked because of the war,” one farmer said in a Drop Site News video reposted by Farm Action U.S. on X.

As explained by Blackmon, the reality painted by the WTO is grim. African nations, such as Kenya, Malawi, Mozambique, Rwanda, South Africa, Tanzania, Uganda and Zimbabwe are likely to be the most highly affected by the fertilizer shortages, according to the WTO.

“Other places around the world, like Sub-Saharan Africa or many parts of Southeast Asia, and people are simply not going to be able to afford those higher food prices, and they will literally have to do without,” E.J. Antoni, chief economist at The Heritage Foundation, previously told the DCNF. “And in the case of necessity, like food, doing without means death.”

If the price of fertilizer rises too high, developing nations will no longer be able to continue farming, raising the price of food exponentially, Antoni previously told the DCNF. Antoni explained that the famine would not touch the United States; however, Americans “will pay more for food.”

Americans would have to spend their “disposable income” on food, Antoni previously said. Fertilizer prices spiked similarly following Russia’s February 2022 invasion of Ukraine.

“A shortage is certain, and so crop yields, especially in the northern hemisphere, are likely to be down this year in areas that lack their own fertilizer production,” J.D. Foster, a former senior fellow on the economics of fiscal policy at The Heritage Foundation, previously told the DCNF.