Iran war gas prices are climbing fast. The main drivers are the war and fears of disruption to the Strait of Hormuz. That narrow shipping channel carries roughly a fifth of the world’s oil.
Geopolitical shocks in the Middle East have pushed crude oil sharply higher. The 2026 Iran war is the biggest of them. Refining margins have also hit record levels. As a result, fuel prices could stay elevated into the fall.
Iran War Gas Prices and the Strait of Hormuz
The war has a documented history. Here is the sequence of events.
In 2015, the Obama administration and five other world powers signed the JCPOA. The deal capped Iran’s uranium enrichment. It also put the country’s nuclear program under international inspection.
In 2018, during his first term, Trump withdrew the U.S. from the agreement. He called it “defective at its core” and reimposed sanctions.
As a result, over the following years, Iran built up enriched uranium it had not held under the deal. By 2025, assessments put the stockpile at over 400 kilograms enriched to 60%. Policy analysts have called that a direct and foreseeable consequence of the withdrawal.
In February 2026, the U.S. and Israel launched military operations against Iran. The administration cited a rebuilt nuclear threat as its rationale. The Arms Control Association notes ongoing U.S. allegations about Iran’s nuclear program but states these claims lack evidence.
Would the war have happened had the 2015 deal stayed in place? That is genuinely disputed. The sequence of events above is not.
The War Powers Question
Trump began the February 28 operation without prior congressional authorization. He has since maintained that he does not need it.
He told Congress that a ceasefire had ended the “hostilities.” However, fighting and a Strait of Hormuz blockade continued past the 60-day War Powers Resolution deadline. As of this publication date, both are still continuing.
Several bipartisan resolutions have tried to force a vote or require authorization. All have failed in the House and Senate along party lines. House Speaker Mike Johnson and Senate Majority Leader John Thune say the president’s actions fall within his commander-in-chief authority.
Congress does hold the constitutional power to declare war. So far, it has chosen not to use it.
What the War Has Cost So Far
The costs are substantial and measurable, however the underlying dispute is resolved.
The Congressional Budget Office puts direct Defense Department costs at about $38 billion through August 1, 2026. That figure is rising by roughly $2–$3 billion a month.
The CBO also estimates the war will add about 0.5 percentage points to inflation in early 2027. The reason is its effect on oil and shipping.
Those numbers come on top of the human cost. Gas prices, tourism, and consumer costs have all been affected too.
The UN Fact-Finding Mission’s Findings
There is also a very recent development. On September 17–18, 2026, a UN Human Rights Council-mandated fact-finding mission issued its conclusions. It found “reasonable grounds to believe” the United States committed the war crime of launching indiscriminate attacks.
The finding covers two specific February 28 strikes:
- Minab: A strike on the Shajareh Tayyebeh primary school killed more than 150 people. Around 120 of them were children.
- Lamerd: A strike on a sports and cultural complex killed roughly 20–22 civilians.
It helps to be precise about what the finding is and is not.
- It applies to the conduct of those two strikes. It is not a blanket finding about the war or its architects.
- It is a fact-finding mission’s assessment, not a criminal conviction. It could, however, be used as evidence in a future proceeding.
- The U.S. disputes it. A White House spokeswoman said Iran was “the only party” that had committed war crimes in the conflict.
- The Pentagon has not yet released its own investigation into the school strike. It has reportedly not disputed U.S. responsibility for it.
How Tariffs Actually Work
The core economic mechanism is simple. A tariff is a tax collected at the U.S. border. The American company importing the goods pays it, not the foreign government or exporter.
The importer then decides how much of the cost to absorb. The rest gets passed on to customers.
Trump repeatedly told Americans that foreign countries and corporations would “eat” the tariffs. That is not how tariffs work, and it is not what the data show.
Consider the research:
- Federal Reserve staff: Their spring 2026 research found that tariffs implemented through November 2025 raised core goods prices by an estimated 3.1% through February 2026. It concluded the tariffs could explain all of the excess goods inflation relative to pre-pandemic trends. It described the pass-through to consumers as essentially dollar-for-dollar.
- New York Fed: A separate analysis found U.S. consumers and companies were absorbing close to 90% of tariff costs.
- Tax Foundation: It estimated the 2025 tariffs worked like a $1,000 tax increase for the average American household.
The Manufacturing Jobs Tariffs Were Meant to Bring Back
One argument for tariffs was that they would revive American manufacturing jobs. So far, the data point the other way.
Bureau of Labor Statistics figures show manufacturing employment fell every month for eight straight months after the April 2025 “Liberation Day” tariff announcement. The total loss was about 72,000 jobs. This is partly because many U.S. factories rely on imported parts and raw materials. Tariffs raise their costs too.
A Center for American Progress analysis of the same data blamed several factors together. It cited new tariffs, restrictive immigration policy, and the phase-out of renewable-energy tax credits. No single policy was the cause.
Harvard’s Gordon Hanson made a similar point. He called the tariffs unhelpful. He also noted that the sector’s decline reflects older trends, such as automation and weak global demand.
Immigration Enforcement and the Labor Force
Stepped-up immigration enforcement has also tightened labor supply in specific industries.
Construction already had an estimated worker shortfall. A large share of construction workers are immigrants. As a result, enforcement actions have slowed or halted projects in some regions. That has added to the housing shortage.
Agriculture faces a similar problem. Foreign-born workers make up a large majority of the farm workforce. Harvest labor shortages have contributed to rising food prices in some markets.
Tourism: A Measurable, Ongoing Decline
Tourism is one of the clearest and most quantified effects. About 4 million fewer international visitors came to the U.S. in 2025 than in 2024. That is a 5.5% drop.
Foreign visitor spending fell by more than $8 billion. According to World Travel and Tourism Council data reported by CNN and other outlets, it was the worst year-over-year decline since the pandemic. It was also steeper than the falloff during the 2008 financial crisis.
Analysts point to several contributing factors:
- Unease about U.S. political rhetoric and domestic unrest
- Immigration enforcement
- Tariff and trade disputes
- Visa-fee confusion
- Rising airfares tied to Middle East conflict
By some measures, the U.S. was the only major global destination with declining international visitor spending in 2025.
Where Reasonable People Disagree
The administration has three stated rationales for tariffs: reshoring manufacturing, national security, and raising federal revenue. The national security case centers on reducing reliance on foreign supply chains, especially China’s.
Independent estimates of the long-run revenue and growth trade-offs vary by methodology. They have also shifted since the Supreme Court’s IEEPA ruling. Any multi-year revenue projection is one estimate among several, not a settled figure.
Even if reshoring succeeds, it will not be fast. Building or retooling a factory takes years. So does training a workforce and standing up domestic supply chains for parts now imported.
Meanwhile, the price increases have landed largely in 2025 and 2026. Any manufacturing payoff is a multi-year proposition at best – if at all.
That gap is the crux of the disagreement, and it is a legitimate one. Supporters see the costs as the necessary price of a long-term structural fix. Critics see a bill coming due with no guaranteed return.
Congress and the Bottom Line
One thread connects the war and the tariffs. In both cases, Congress has had the constitutional authority to check executive action. It can declare or authorize war. It can also oversee trade policy, including tariffs imposed under emergency economic powers.
In both cases, it has largely declined to use that authority fully. Keep that in mind when you vote in the midterms.
Sources and Fact-Check Notes
The Arms Control Association notes ongoing U.S. allegations about Iran’s nuclear program but states these claims lack evidence. https://www.armscontrol.org/
UN war-crimes finding (Minab school, Lamerd sports complex; Iran crackdown finding) — UN Independent International Fact-Finding Mission on Iran, report to the Human Rights Council, released Sept. 17–18, 2026; corroborated by CNN, Al Jazeera, Axios, NBC News, and UN News. https://www.aljazeera.com/news/2026/9/18/united-nations-says-us-may-have-committed-war-crimes-in-iran-what-it-means. Well-supported; casualty counts vary slightly by outlet (150–178 total).
Iran war cost ($38B, ~$2–$3B/month, 0.5-point inflation add) — Congressional Budget Office report, Sept. 15, 2026, reported by Reuters and AP. https://www.local10.com/news/politics/2026/09/15/iran-war-has-cost-the-us-more-than-38b-budget-office-says/ Well-supported; figure excludes personnel casualty and veterans’ costs.
War Powers Resolution votes failing largely along party lines — State/national wire coverage (States Newsroom network), March 2026. https://www.newsfromthestates.com/article/whats-cost-trumps-war-iran-us-house-dem-asks-budget-agency-add-it Well-supported; leadership quotes on commander-in-chief authority confirmed.
Fed finding: tariffs raised core goods PCE prices 3.1% through Feb. 2026, ~full pass-through — Federal Reserve Board FEDS Notes and Federal Reserve Bank of Dallas research, April–May 2026. https://www.federalreserve.gov/econres/notes/feds-notes/detecting-tariff-effects-on-consumer-prices-in-real-time-part-II-20260408.html Well-supported as of spring 2026 — see moderation note below.
NY Fed: consumers/companies paying ~90% of tariff costs; Tax Foundation ~$1,000/household — Reported via Fortune, citing New York Fed and Tax Foundation analyses, Feb.–May 2026. https://fortune.com/2026/05/11/trumptariff-cost-full-pass-through-on-consumers/ Secondary sourcing (news coverage of the Fed/Tax Foundation work), not the primary reports themselves.
Tariffs’ inflation contribution moderating by mid-2026; AI/tech prices as a competing driver — Federal Reserve Bank of Minneapolis, Aug. 2026. https://www.minneapolisfed.org/article/2026/initially-delayed-the-pass-through-of-tariffs-to-consumer-prices-has-arrived Important update — shows the tariff/inflation link isn’t static, unlike the original spring framing.
Supreme Court IEEPA ruling limiting tariff authority — Referenced in Dallas Fed research note, May 2026. https://www.dallasfed.org/research/economics/2026/0505-mau Confirmed the ruling occurred; recommend verifying case name/date directly with a court-reporting source before publishing.
Manufacturing: ~72,000 jobs lost since April 2025’s tariffs, eight straight months of decline — Bureau of Labor Statistics data, reported by The Philadelphia Inquirer/Washington Post, Yahoo Finance, and Common Dreams, Jan. 2026. https://www.inquirer.com/news/nation-world/manufacturing-jobs-factories-economy-20260115.html Well-supported. Note: attribute this to BLS data as reported, not to the Economic Policy Institute specifically — the earlier draft’s attribution should be corrected.
Multi-causal explanation for manufacturing losses (tariffs, immigration policy, clean-energy tax credit phase-out) — Center for American Progress analysis, reported by CBS News, Sept. 2026. https://peachpie.theatl.social/post/70940 Well-supported; original CAP report should be cited directly in a final version rather than a secondary repost.
Tourism: ~4 million fewer visitors in 2025, $8B+ spending drop, 5.5% decline — World Travel and Tourism Council data, reported by CNN, Geographical magazine, and others. https://geographical.co.uk/news/tourism-to-the-us-is-dropping Well-supported across multiple independent outlets.
Immigration/labor figures: construction (~29% immigrant workforce), agriculture (~70%), “44,000 jobs per 500,000 removed” estimate — Carried over from the original draft. Not independently reverified in this pass — these are widely-cited industry estimates, but confirm the exact figures and their source (e.g., American Immigration Council, USDA) before publishing.
JCPOA history, 2018 withdrawal, uranium stockpile figures — Carried over from the original draft; consistent with well-documented public record. Core sequence of events is not seriously disputed; specific stockpile tonnage should be cross-checked against the most recent IAEA report before publishing.
Tax Foundation $1.4 trillion revenue / 0.4% GDP long-run projection — Carried over from the original draft. Not independently reverified in this pass, and likely to have shifted given the Supreme Court’s IEEPA ruling — recommend re-checking the Tax Foundation’s current projection before publishing.