Donald Trump has claimed US petrol prices are “not very high, relatively speaking” as his administration faces growing discontent over the surge in costs triggered by the war with Iran. The national average petrol price stood at about $4.16 per gallon on Tuesday, according to AAA – $0.37 lower than a month ago, but still roughly $1 more expensive than the same time last year.
The US president has faced sustained frustration over the sharp rise in fuel costs since the start of the US-Israel war on Iran in late February. While he has repeatedly sought to downplay the increase, voters are preparing to cast their ballots in November’s crucial midterm elections. Speaking to reporters on Tuesday, Trump said the administration was releasing “a lot of oil coming out of the Hormuz strait”, one of the world’s most vital trade passageways, which has been virtually closed since the conflict began.
Prices remain far higher than before the war, with oil and gas costs jumping sharply after the Strait of Hormuz effectively shut earlier this year. Iran threatened ships in the area and maritime insurers cancelled war risk cover. Trump pointed out that petrol prices are still lower than during the Biden administration, adding that the previous leader “wasn’t stopping the country from having a nuclear weapon”.
The sharp rise in energy costs has driven inflation to 3.8% last month, the highest since 2023. Americans are feeling the effects on everyday life, including groceries and air travel. Moody’s Analytics estimates the war and high energy prices have cost American households around $100bn. The Bureau of Labor Statistics is due to release May inflation estimates on Wednesday, which economists expect to remain high.
The closely watched report will likely shape next week’s US Federal Reserve meeting, where chair Kevin Warsh and the board will decide whether to adjust interest rates amid elevated inflation and a relatively strong labour market.
