Trump Predicts High Gas Prices Will Persist Until Midterms Amid US-Iran Conflict

President Trump recently informed reporters that Americans should brace for sustained high oil and gas prices leading up to the November midterm elections. He linked this trend to the ongoing US-Iran conflict, which has significantly impacted energy markets throughout 2026.

On September 9, Trump made these remarks before heading to Texas for a Republican Party convention, expressing optimism that prices would decrease after the elections. On the same day, Brent crude prices surpassed $100 per barrel, while the national average for gasoline reached $4.22 per gallon, a figure that has become common for American drivers this year.

The US-Iran conflict, which escalated on February 28, 2026, has disrupted oil traffic through the Strait of Hormuz, a crucial passage for approximately 20% of the world's oil supply. Additionally, Houthi attacks on shipping routes have further complicated the situation, adding a risk premium to oil prices.

Trump has actively engaged with major refiners and fuel retailers in an attempt to alleviate consumer burdens. Current fuel prices have significant implications for American households, with a family driving 1,000 miles per month in a vehicle averaging 25 miles per gallon spending around $169 on gas at the current rates.

Market analysts suggest that a return to normal traffic in the Strait of Hormuz could lower Brent crude prices back to the $70-$80 range, as underlying market fundamentals do not support sustained triple-digit oil prices. The prolonged period of high energy costs is expected to have broader economic effects, influencing transportation and logistics costs, which in turn affect consumer goods pricing.

Latest Developments

• Brent crude oil surged to approximately $101 per barrel on September 9, marking a level not seen since July.
• The Dow Jones Industrial Average fell by 300 to 346 points, roughly 0.6-0.7%, while the S&P 500 and Nasdaq Composite dropped by 0.3-0.5% and 0.5-0.7%, respectively.
• Escalating tensions between the US and Iran, including reports of tanker strikes and supply route disruptions, have been identified as the catalyst for the recent spike in oil prices.
• The Strait of Hormuz remains a critical chokepoint for global oil exports, with military activity in the region causing fluctuations in crude markets.
• While the broader market declined, companies like Exxon Mobil and Chevron experienced gains on September 9.
• Higher energy costs are raising inflation expectations and contributing to concerns about stagflation, impacting various sectors of the economy.
• The Federal Reserve faces a challenging decision as rising inflation complicates monetary policy, with rising Treasury yields reflecting this dilemma.

New Developments on Canadian Products and US Federal Contracts

On September 9, President Trump announced his intention to remove Canadian-origin products from the US General Services Administration’s Multiple Award Schedules, which facilitate over $50 billion in annual government purchasing. This announcement led to a decline in shares of several Canadian companies, including CGI Inc., WSP Global, and Bombardier, with some stocks dropping as much as 8%.

The directive targets Canadian companies due to perceived inequities in access to US procurement processes, coinciding with Canada imposing retaliatory tariffs on approximately $20 billion worth of US goods. The US is also set to implement import bans on specific Canadian products, including alcohol and dairy, starting September 29.

CGI Inc. is particularly vulnerable, with estimates suggesting that 15-20% of its total revenue comes from US government contracts. The ambiguity surrounding what constitutes "Canadian-origin products" raises concerns among analysts, as it could impact various sectors, including IT services and engineering.

New Developments

• President Donald Trump predicts that oil prices will remain high until after the November midterm elections.
• Brent crude oil prices rose by 3.78% to $103, marking the highest level since May, influenced by recent strikes around the Strait of Hormuz.
• The American Automobile Association (AAA) reported a national gasoline average of $4.22 per gallon, up from $4.01 a month earlier.
• Traders are pricing the ongoing conflict in Iran into both oil and risk assets, with Democrats currently favored to sweep Congress according to Polymarket bettors.
• Historical data suggests that wars influence oil prices more than election outcomes, as seen in past midterms.