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US and Israeli forces attacked Iran
The conflict between the US and Iran began when US and Israeli forces attacked Iran at the end of February 2026.























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The conflict between the US and Iran began when US and Israeli forces attacked Iran at the end of February 2026.
In June 2026, President Trump signed a memorandum of understanding to end the war, but the 60-day peace talks cited in it passed without progress.
The war with Iran will end immediately after the November 3 midterm elections because Iran can no longer hold out.
Once the war with Iran ends, gasoline prices, currently over four dollars per gallon, will fall significantly, possibly below two dollars.
Iran is desperate to influence the US midterm elections to bring in weak Democratic legislators who would allow Iran to obtain a nuclear weapon.
Iran must not be allowed to develop or possess a nuclear weapon.
We control the Strait of Hormuz, so we should rename it the 'Trump Strait'.
On September 9, 2026, President Trump spoke at the Republican Party's midterm convention in Dallas, making the war with Iran a key focus.
On September 9, 2026, oil prices surpassed $100 per barrel for the first time since July, and gas prices surged 7.3 cents per gallon.
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01 General knowledge
The current surge in oil prices is the latest chapter in a long history of dramatic swings driven by geopolitical events. In 2008, prices soared to record highs near $150 a barrel before crashing during the global financial crisis. Just twelve years later, during the Covid-19 pandemic, oil prices briefly went negative as demand collapsed. More recently, the Russia-Ukraine war caused significant price spikes, and now the US-Iran conflict is again disrupting global energy markets.
These price swings have profound effects on the global economy. When oil prices rise sharply, they can fuel inflation, slow economic growth, and even trigger recessions. Central banks often respond by raising interest rates, which can further strain consumers and businesses. The current situation, with oil above $100 a barrel, echoes past crises and raises fears of stagflation—a dangerous combination of high inflation and stagnant economic growth.
02 The subject
The Strait of Hormuz is a narrow waterway between the Persian Gulf and the Gulf of Oman, and it is one of the world's most strategically important shipping lanes. Before the current conflict, about 20 million barrels of oil passed through it daily, roughly a fifth of the world's oil supply. This makes it a vital artery for global energy trade, and any disruption there can have immediate and severe consequences for oil prices worldwide.
The strait's importance is why Iran's threats to close it, and the US military's efforts to keep it open, have such a powerful impact on markets. When Iran declared the strait closed in July 2026, the US launched military strikes to ensure freedom of navigation. The ongoing tensions and attacks in the area have made shipping risky, leading to a slowdown in vessel movements and increased costs for shippers.
03 Explained
The price of crude oil is only one part of what consumers pay at the gas pump. In the UK, for example, fuel duty and taxes make up a significant portion of the final price. Fuel duty is currently 52.95p per litre, which includes a temporary 5p reduction. This tax generates around £24 billion in revenue for the government, accounting for about 1.9% of total income.
Beyond taxes, the cost of transporting and refining oil also adds to the final price. When crude prices rise, shipping companies often add fuel surcharges to cover their increased costs. For instance, UPS and FedEx have implemented such surcharges, and truckload pricing has reached a four-year high. These added costs ripple through the economy, affecting the price of goods that are transported by road, rail, or air.
04 Previous developments
The current oil price surge is the result of a conflict that began on February 28, 2026, when the US and Israel launched strikes on Iran. This led to immediate retaliation and the closure of the Strait of Hormuz, causing oil prices to jump. In early March, the death of Iran's Supreme Leader in a targeted strike caused another spike, with prices rising over 7%.
After a period of relative calm and even peace talks in May, tensions flared again in July. On July 12, the US launched a new wave of strikes after Iran declared the strait closed and attacked a commercial ship. This led to a series of tit-for-tat attacks, and by July 23, Brent crude had surged past $100 a barrel for the first time since May. A brief pause in fighting in late July brought prices down, but they remained volatile.
In late August, the conflict escalated once more. The US conducted airstrikes on Iranian rocket launchers on Larak Island, and Iran retaliated by targeting US bases in Jordan. This renewed fighting pushed oil prices higher again, and by September 9, Brent crude had climbed back above $100 a barrel.
05 The environment
The conflict has created a volatile environment for global energy markets. While the Strait of Hormuz remains a key concern, some oil is still flowing through it via 'dark' tankers that operate without broadcasting their locations. This covert trade, along with pipeline workarounds and stockpile releases, has helped limit the economic impact, but the situation remains fragile.
The economic pressure is being felt worldwide. In the US, the Federal Reserve is grappling with inflation that has reached 3.7%, nearly double its target, and is considering interest rate hikes. In Europe, natural gas prices have spiked above €70 per megawatt-hour, raising fears about winter shortages. Governments are also responding: the UK has announced support for vulnerable households, and the US has considered suspending the Jones Act to ease fuel costs.
06 Why this happened
The primary driver of the current price surge is the direct disruption of oil supplies caused by the US-Iran conflict. Attacks on oil facilities and ships, along with the threat to the Strait of Hormuz, have raised concerns about supply shortages. The US military's destruction of Iranian tankers and Iran's retaliatory strikes have made shipping through the region risky, leading to a 'chokehold' on a critical waterway.
Beyond the physical disruptions, the conflict has also created a risk premium in oil markets. Investors are pricing in the possibility of even greater supply disruptions, such as damage to major energy infrastructure. Analysts predict that if the conflict continues, prices could rise to between $95 and $120 per barrel, with potential spikes up to $150 if major facilities are hit. This uncertainty is a key factor in the price surge.
07 Facts and events
The impact of high oil prices extends far beyond the gas pump. In the US, consumers have already spent an estimated $33 billion more on gasoline since the war began, and the average price reached $4.63 a gallon in May. This has led to changes in behavior, with people driving less and cutting back on discretionary spending. The agricultural sector is also feeling the strain, as higher diesel costs for farmers and food producers are expected to push up grocery prices.
The conflict has also had a significant humanitarian and economic toll on the region. The closure of the Strait of Hormuz has hindered aid deliveries, and Gulf economies have suffered an estimated $58 billion in damage. In Europe, the disruption of LNG exports from the Persian Gulf has raised concerns about gas shortages this winter, with storage levels below historical averages. These far-reaching consequences show how a regional conflict can have global implications.
08 Questions answered
The Jones Act requires goods shipped between US ports to be carried on US-built, US-flagged, and US-owned vessels, and suspending it would allow foreign tankers to transport fuel domestically, potentially lowering costs.
The conflict has disrupted LNG exports from the Persian Gulf, causing European gas prices to spike and raising concerns about winter shortages, with EU storage levels at only 64.7% full.
Stagflation is a combination of high inflation and stagnant economic growth, and the oil price shock is raising fears of it because it can pressure central banks to keep interest rates high even as growth slows.
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