With 59% of Americans opposed to the Iran conflict and petrol above $4 a gallon, the US is fighting a war whose domestic economic costs may outlast its military objectives

Wars have historically been reliable generators of domestic political solidarity. The rally-round-the-flag effect, documented across decades of conflict from the Gulf War to the immediate aftermath of September 11, typically delivers a president a surge in public approval that can persist for months. The current US-Israel-Iran conflict is producing no such effect. Fewer than three in ten Americans support the war. Nearly six in ten actively oppose it. That two-to-one ratio against military engagement is the kind of number more commonly associated with the exhausted final years of a prolonged, failing campaign than with a conflict still in its opening phase.

That polling reality is not simply a political inconvenience for the White House. It is a structural constraint on the war's conduct, duration and diplomatic resolution, and it is being compounded daily by an economic transmission mechanism that connects events in the Strait of Hormuz directly to the grocery bills of voters in Michigan, Pennsylvania and Arizona.

The Energy Shock

The Strait of Hormuz is one of the most consequential geographic chokepoints on earth. Approximately 20% of global daily oil consumption passes through its 33-kilometre navigable channel. Iran's threatened closure of the strait, combined with the disruption to regional shipping already caused by the conflict, has driven energy markets into a sustained risk premium. The national average petrol price in the United States has breached $4 a gallon, a threshold that in American political culture carries a significance disproportionate to its arithmetic. It is the number that tells a working household that the economy is moving against them.

The inflationary arithmetic that follows is mechanical. Higher energy prices raise transport costs. Higher transport costs raise the input costs of manufacturing and logistics. Those costs are passed on to consumers in the price of goods on retail shelves, in delivery surcharges and in the operating costs of businesses that employ people. The World Bank estimates that a sustained 10% rise in oil prices adds approximately half a percentage point to global inflation. Analysts at several major banks have placed $150 per barrel oil within the range of plausible scenarios if shipping disruptions through the Strait persist or intensify. That would represent an oil price shock larger than the one that followed Russia's invasion of Ukraine in 2022 and considerably larger than the one that contributed to the political destruction of the Biden presidency.

The Inflation Trap

The United States has spent the better part of three years attempting to escape the inflationary cycle that began in 2021. The Federal Reserve raised interest rates to their highest levels in two decades. Core inflation has moderated from its 2022 peak of 9.1% but has proven stubbornly resistant to the final descent toward the 2% target. Consumer expectations for future inflation, a variable the Fed watches with particular anxiety because of its self-fulfilling tendencies, had only recently begun to stabilise when the Iran conflict reignited energy market volatility.

The political consequences of a renewed inflation surge are severe and, critically, cross-partisan. Polling consistently places the cost of living as the most important issue facing the country, cited by roughly one in four Americans regardless of party affiliation. Immigration is a priority for Republican voters; health care and climate for Democrats. Inflation belongs to everyone. It is one of the very few issues on which the electorate speaks with something approaching a unified voice, which means that when prices rise, no coalition of supporters offers a president meaningful shelter from the blowback.

That cross-partisan exposure is precisely why the current conflict sits so uncomfortably within the political system. A president prosecuting an unpopular war that is simultaneously driving up the cost of living faces a compounding problem: the war depresses approval ratings, and the economic consequences of the war compound that depression among voters who might otherwise have remained broadly supportive on other grounds.

The Regional Stakes

The conflict's consequences extend well beyond American domestic politics. Iran's ballistic missile strikes have already hit US military installations across the Gulf region, including facilities in Qatar, Bahrain, the UAE, Kuwait, Iraq, Jordan and Saudi Arabia. The involvement of that many states, even where strikes were directed at US rather than local targets, has drawn the entire Gulf Cooperation Council into an unwanted proximity to a conflict that threatens the energy export infrastructure on which their fiscal stability depends.

Saudi Arabia, which requires an oil price of approximately $80 per barrel to balance its budget under the current Vision 2030 spending programme, faces a paradox: higher oil prices improve its fiscal position in the short term, but sustained regional instability threatens the foreign direct investment and tourism flows central to its diversification strategy. The UAE, which has spent two decades positioning itself as the region's premier hub for trade, finance and logistics, faces shipping disruption that cuts across the core of its commercial model.

Israel's economic exposure is also considerable. The shekel has weakened materially since the conflict escalated. Tourism, which contributed approximately $7 billion annually to the Israeli economy before the current cycle of conflict began, has effectively ceased. Defence spending has risen sharply as a share of GDP, crowding out investment in the technology sector that has been the primary engine of Israeli productivity growth over the past two decades.

What History Suggests

The Iraq war, which generated initial public support of over 70% in the United States in 2003, saw that support collapse to below 40% within three years as the economic and human costs accumulated without a credible endpoint coming into view. The pattern is consistent across modern American military engagements: initial tolerance erodes as costs become visible and objectives remain unclear. The Iran conflict begins from a position of public opposition that Iraq did not reach until years into its duration.

The fiscal dimension compounds the problem. The total cost of the Iraq and Afghanistan wars, including long-term veteran healthcare and debt servicing, was estimated by the US Congressional Budget Office at over $6 trillion. The Iran conflict, prosecuted against a significantly more capable adversary with a direct capacity to disrupt global energy markets, carries cost trajectories that analysts have barely begun to model. This arrives at a moment when US federal debt exceeds $36 trillion and when the Federal Reserve's capacity to cushion any resulting economic shock through monetary easing is constrained by inflation concerns that the conflict is actively worsening.

Keynes, writing in the aftermath of the First World War, observed that the economic consequences of conflict rarely confine themselves to the battlefield or the balance sheet of the defeated. They spread, through energy prices and inflation and institutional erosion, into the daily lives of populations far from the fighting. His warning was directed at the architects of Versailles. A century later, the mechanism he described is operating in real time, visible in the petrol prices of American forecourts and in the cargo tracking data of ships that have stopped moving through the world's most critical oil transit corridor.

The war may have been judged necessary by those who chose it. It was not wanted by the public asked to bear its costs.