Category World News

Surging energy prices caused by the US-Israel war on Iran could ripple across the United States economy, heaping further strain on consumers at a time when cost-of-living issues are already a primary concern.

The price of crude oil increased from about $67 per barrel before the war began on February 28 to nearly $97 on Monday, as the conflict snarls production and transport in one of the most energy-rich regions on earth. Oil temporarily passed $100 per barrel on Sunday before slightly easing back.

The price tracker GasBuddy reported on Monday that the average price of gas in the US has risen by 51 cents per gallon over the last week.

“Yes, yes, definitely,” said 52-year-old Alma Newell when asked if she was worried about price increases at a gas station in the coastal city of Goleta, California.

Newell said she is out of work with a shoulder injury and worried that rising costs could stretch her already limited budget.

“The prices have a big impact because I’m not working right now,” she said. “Food and rent are already very expensive.”

“It’s crazy,” she added. “Because the war is so unnecessary.”

Cost of living issues

Rising prices could deepen frustration with the administration of US President Donald Trump and put greater political pressure on the White House, already struggling to address cost-of-living issues with the crucial midterm elections set to take place later this year.

“I think the current price increase in oil suggests the US will see $3.50 to $4 gasoline by next week, and $5 diesel this week,” said Gregory Brew, a senior analyst on Iran and oil at the Eurasia Group.

The highest recorded average for gas prices at the pump was in June 2022, when prices soared to $5.034, months after the Russian war on Ukraine started, according to Gas Buddy, which tracks fuel prices going back to 2008.

“The impact [now] is more political than economic, as high gasoline prices generate negative press and can add to the perception that the government is not properly handling the economy. That means Trump will feel more political pressure to end this war quickly.”

A Pew Research Center poll in early February suggested widespread anxiety about the rising cost-of-living before the US and Israel launched attacks on Iran, with 68 percent of respondents saying they were very or somewhat concerned about gas prices.

“I’m not too worried myself because I have a hybrid car and ride my bike,” said 72-year-old Bjorn Birmir at the gas station in Goleta, California. “But for people in general, it will make life more expensive. Prices are already high, and it will make them even higher.”

Ongoing disruptions

The disruptions caused by the war include the shuttering of the Strait of Hormuz, a key node in global transit and shipping. Iran has long said that it could close down the strait in the event of a showdown with the US and Israel.

About 20 percent of global oil and a significant portion of natural gas pass through the strait, predominantly to Asia, supplies that are now stranded as traffic through the narrow waterway has ground to a halt. Iranian attacks on energy infrastructure in countries across the region have also led some countries to scale back production.

Other economic sectors are also feeling the squeeze.

Goods such as fertiliser, vital for agricultural production, are seeing price increases just ahead of the spring planting season in the Northern Hemisphere. About one-third of the global fertiliser trade passes through the Strait of Hormuz.

Effects of the war could ripple throughout the global economy, with poor countries especially hard-hit. Pakistan announced a series of austerity measures and cuts to fuel subsidies on Monday, while Bangladesh shuttered universities and announced restrictions on fuel use as a result of the war.

US officials and countries around the world have already discussed measures to help ease the shock of rising energy prices, including the potential release of strategic oil reserves in a bid to temporarily boost global supply.

The G7 said on Monday that it would take “necessary measures” to support energy supplies, but held off on announcing the release of strategic reserves, with energy ministers set to meet on Tuesday to discuss the matter further.

The US has a strategic oil reserve of more than 415 million barrels, one of the largest in the world, that it could release in coordination with allied countries.

But it is unclear when these measures would kick in and how long such steps could help fill the gaps created by the war.

Rachel Ziemba, adjunct senior fellow at the Center for a New American Security, says that much depends on whether the war is brought to a speedy conclusion or continues on for weeks or even months, with the possibility of further escalation.

Thus far, neither the US and Israel nor Iran has suggested it are willing to stop the war anytime soon, although Trump told CBS News on Monday that “the war is very complete, pretty much”, comments that helped ease some of the price swings in oil and stocks.

“If the war continues, we would see oil prices not only remain elevated, but perhaps rally further as markets price in a more protracted outage,” said Ziemba. “There’s also the question of, when it does end, how much damage will be done to infrastructure and just how quickly supplies could come back online.”

Initial polling has suggested that the war is unpopular in the US, with a Quinnipiac University poll released on Monday finding that 53 percent of voters who responded oppose Trump’s military action in Iran, including 60 percent of political independents.

That lack of popular support could present a political headache for Trump and his Republican Party if voters connect the war to increasing prices. Thus far, Trump has largely dismissed concerns about the war’s possible impact on the rising cost of living.

US President Donald Trump cites “information and belief” for his claim that Iran would have taken over the Middle East without US intervention.

Iran’s Foreign Minister Abbas Araghchi told PBS News that talking or negotiating with the US is no longer on the agenda. He says that despite making progress during previous rounds of negotiations, the US still chose to attack Iran.

US President Donald Trump threatened to escalate attacks on Iran if it disrupted global oil supplies, saying “they’ll get hit at a much, much harder level.”

Itamar Greenberg laughed when asked if he thought he should be afraid. The 19-year-old Israeli antiwar activist had just described being spat on in the street and is the target of an online hate campaign.

“Yes!” he finally responded. “If I thought about it, I probably should be. I just don’t have time.”

Voices like Greenberg’s are rare in Israel at a time when public clamour for war is growing, and genocidal language already familiar to millions of Palestinians is reemerging, but with a different target – Iran.

Officially, 11 Israelis have been killed in Iranian strikes since the US and Israel launched their war on Iran on February 28. What the actual number might be, or how many of Iran’s ballistic missiles may have penetrated the country’s Iron Dome defence shield, is unknown.

Speaking at the site of an Iranian missile strike in West Jerusalem, shortly after the start of the US-Israeli attacks on Iran, Israeli Prime Minister Benjamin Netanyahu returned to the use of apocalyptic language that has characterised the genocide his country has conducted in Gaza. Comparing Iranians with the Jewish people’s biblical foe, Amalek, who the Jews had been divinely ordered to wipe from the face of the planet, Netanyahu told reporters: “In this week’s Torah portion, we read, “‘Remember what Amalek did to you.’ We remember, and we act.”

So far, Iran claims to have launched strikes across Israel, saying its missiles and drones hit military sites, symbolic infrastructure, and even Netanyahu’s office. Tehran has described the attacks as precise and strategic, rather than indiscriminate and part of a broader regional response. Iran also claims to have targeted locations such as Tel Aviv, Ben Gurion airport and Haifa.

However, Israeli officials have denied many of the specific claims. Netanyahu’s office dismissed Iranian assertions about hitting his office, or affecting his condition, as “fake news”, with stringent reporting restrictions on Iranian strikes within Israel making confirmation either way difficult.

What is clearer is that against the drumbeat of Iranian strikes, the fervour for war appears to be increasing among the public. A poll carried out last week by the Israel Democracy Institute (IDI) suggested overwhelming public support for the war, with 93 percent of Jewish-Israeli respondents expressing support for the strikes on Iran, and 74 percent expressing support for Netanyahu, the country’s historically divisive prime minister.

“No one’s talking about opposition to the war,” Greenberg said, describing an environment in which figures from across Israel’s media and political landscape – with the exception of the left-wing Hadash party and antiwar organisations such as Greenberg’s Mesarvot – had lined up behind the war. “It’s also getting increasingly violent,” he said.

“We held a protest on Tuesday, where the police were already waiting. They beat and arrested us. I was illegally strip-searched,” he said, describing it as efforts intended to humiliate him.

Greenberg is no stranger to such tactics. Six months ago, after being arrested for protesting the genocide in Gaza, prison guards had threatened to carve a Star of David on his face, a permanent reminder of what they thought his priorities should be.

It’s not just antiwar activists who have faced the brunt of the Israeli security establishment’s force.

“The atmosphere is very violent,“ lawmaker Ofer Cassif of the Hadash party told Al Jazeera. “When I leave the house, I’m more worried by the danger posed by a physical attack by fascists than I am by any missile,” he said.

Hadash and lawmakers like Cassif have been targeted by physical threats and attacks throughout the Gaza war. But criticism of the Netanyahu government’s handling of Israeli captives in Gaza meant that opposition to the Gaza war was – comparatively – more socially acceptable. When it comes to Iran, the current climate is toxic, Cassif said.

“We’re often accused of supporting the regime in Tehran,” Cassif explained of the attempts to delegitimise their opposition to the war.

“We’re unequivocally not. We want to see that regime go, but we’re not going to allow Netanyahu to say he’s doing this for the Iranian people. He isn’t. That’s not just rhetoric, that’s fact. The Israeli leadership was just as supportive of the shah as the US, and he was a murderous dictator no less than the current regime,” Cassif said, referring to Mohammad Reza Pahlavi, the leader of Iran before the Islamic revolution.

For now, analysts and observers in Israel describe a society that believes it is almost engaged in a holy war.

“They brought an antiwar activist onto one of the light news programmes,” political analyst Ori Goldberg said from near Tel Aviv, “and she was treated like you would a flat-earther. It’s as if it’s inconceivable that anyone would oppose this war.