Energy was a headline promise in Trump's 2024 bid, including sub-$2 gas and a return to US "energy dominance." Prices did cool early in his second term, but this year they rose after the Iran war he initiated with Israel in February choked off international fuel flows and kept stocks scarce.
Two years into Trump's return, gasoline is up almost 40% and tops $4 a gallon. Diesel has risen 74%, and electricity prices are roughly 15% higher nationwide. Biden still holds the single-month record at $5.02 a gallon in June 2022, but the average pump price during Trump's second term is now only days from eclipsing Biden's $3.47 average, likely by the Nov. 3 election.
Bloomberg's "US Drivers Already Hit With Extra $83 Billion in Gasoline Costs" adds up the burden versus a prewar benchmark. The realized portion through Oct. 12, 2026 comes from the gap between AAA pump prices and that benchmark, multiplied by weekly gasoline product supplied reported by the US Energy Information Administration. Demand assumptions follow BNEF's North America outlook, applying a U.S. share equal to 90% of regional demand in 2025.
If weekly prices fall under the benchmark, they add no incremental cost and do not negate prior overages. Totals run through December 2027, and in the April reopening case the cumulative figure is still rising at that point.
Energy is back at center stage, but now as a vulnerability for the incumbent. Karen Clay, a faculty member in Carnegie Mellon University's economics and public policy fields, said, "People were hoping to vote for something that would lead to lower prices, but that change has not materialized." "It looks like prices have gone up, at least in part, because of the activities of the US government."
Trump's war with Iran and unsuccessful efforts to end it give voters a straightforward link to higher energy costs. Concerns about data centers are adding to worries over electricity bills, complicating the president's backing of artificial intelligence. "The president has said 'Pretend I'm on the ballot,' and it looks like voters might when it comes to energy," said Kevin Book, managing director at ClearView Energy Partners.
A new Pew Research Center survey shows how much this resonates: 74% of respondents said they were "very concerned" about energy prices, up from 43% before the Iran conflict and higher than concerns about healthcare, housing or the job market.
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High energy costs are threatening to turn reliable Republican states into swing contests. Per the Cook Political Report, Kansas, Iowa, Ohio, Texas and Alaska - states Trump carried by double digits in 2024 - have shifted into the Senate toss-up column. "It's perceived that the Iran conflict is what's causing this," said James West of Melius Research. "Oil prices, even post conflict, will remain elevated."
Down-ballot Republicans are reacting. In Iowa, Ashley Hinson argued for suspending gasoline taxes, saying, "Iowans are being squeezed and shouldn't have to foot the bill at the pump or the checkout line for the war in Iran." Democrat Josh Turek called rising costs the "number one issue," adding, "She has voted in favor of continuing this war in Iran that has led to fuel prices, fertilizer prices and diesel prices to be at an all-time high." In Kansas, Roger Marshall called the cost of gasoline "absolutely the barometer for this election." And in Texas, Axios reported that, speaking to donors and lobbyists, Ken Paxton said his campaign was being significantly weighed down by fuel costs: "People are feeling the pinch," he said in a recording the outlet obtained. "It's the war, it's gas prices, it's diesel."
The administration has tried to cushion the supply shock from the Iran war. A White House official said it temporarily allowed nationwide sales of gasoline with 15% ethanol and issued a Jones Act waiver for fuel shipments. Other moves include allowing wider use of tax-exempt diesel, pressing G7 allies to release fuel stockpiles, and reaching a deal with Vladimir Putin for additional supplies.
The White House also committed taxpayer dollars to expand a Texas refinery, said it would fund growth in electrical infrastructure, and backed the Ratepayer Protection Act aimed at capping power costs tied to big data centers. In late August, it unveiled an agreement to secure majority control of a substantial portion of Venezuela's oil assets, though results hinge on fields that are old, degraded, or expensive to tap.
"President Trump remains committed to unleashing American energy dominance, cutting costs, and putting more money back in the pockets of hardworking American families," said Taylor Rogers, a White House spokesperson. "The President wants to see prices at the pump fall and continues to take historic measures to alleviate temporary disruptions as oil flowing through the Strait of Hormuz approaches pre-conflict levels."
Persistent fuel prices are coursing through supply chains, influencing inflation expectations, pushing bond yields higher, and prompting the Federal Reserve to increase interest rates to dampen demand. The average 30-year mortgage rate now stands at 7.5%, a rise from a little above 6% before the war with Iran. Annual inflation runs at 3.7%, versus 2.4% before the conflict.
The bottom line: elevated energy prices are pulling on prices, rates and voter sentiment all at once, which can sway borrowing costs and the pricing power of companies that pass fuel costs through - the stuff that shows up in your portfolio.
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