Trump advisers are privately worried the Iran war’s fuel cost surge will cost Republicans at November’s midterms, as U.S. airlines face a 30% jump in fuel bills and airfares hit $570 for a domestic round trip, the Wall Street Journal (gated) reports.
Summary:
- Trump administration advisers are privately concerned that surging fuel costs stemming from the Iran war will carry a political price for Republicans in November’s midterm elections, with many eager to end the conflict before prices damage the party’s standing, according to people familiar with the matter cited by the Wall Street Journal
- U.S. airlines spent more than $5 billion on fuel in March, a 30% increase from a year earlier, with jet fuel prices roughly doubling in the weeks following the outbreak of the conflict, according to government data cited by the Wall Street Journal
- The average domestic round-trip economy airfare rose 21% year-on-year to $570 in March, according to Airlines Reporting Corp. data cited in the report, with carriers raising ticket prices and cutting unprofitable routes in response
- Airlines for America president Chris Sununu, a former New Hampshire governor, has warned the administration that even a full reopening of the Strait of Hormuz would take months to translate into lower ticket prices, with elevated fares expected to persist through summer and autumn, per the Wall Street Journal
- Spirit Airlines collapsed in part because the sustained jet fuel price surge derailed its plan to emerge from bankruptcy, with the Trump administration and the carrier failing to agree on a federal financial lifeline of up to $500 million, according to the report
- A group of budget airlines separately sought $2.5 billion in federal assistance to offset higher fuel costs, while 63% of Americans blamed Trump for rising gas prices in a poll conducted by NPR, PBS and Marist, per the Wall Street Journal
President Trump’s advisers are privately alarmed that the fuel cost surge driven by the Iran war is becoming a political liability capable of damaging Republicans at November’s midterm elections, the Wall Street Journal reported, as the airline industry intensifies its lobbying of the White House to bring the conflict to a swift close.
The concern inside the administration reflects the scale of the economic disruption flowing from the de facto closure of the Strait of Hormuz since the U.S.-Israeli attack on Iran in late February. Jet fuel prices roughly doubled in the weeks following the outbreak of hostilities and have remained at elevated levels, adding billions of dollars in costs to U.S. carriers and pushing airfares sharply higher ahead of the summer travel season. Many advisers are said to be eager to end the war in time for prices to begin moderating before voters go to the polls, according to people familiar with the matter cited by the Wall Street Journal.
The airline industry has been among the most vocal in communicating those pressures to the administration. Chris Sununu, former New Hampshire governor and president of the industry group Airlines for America, has met in recent weeks with National Economic Council Director Kevin Hassett, Transportation Department representatives and senior White House officials. Sununu’s message has been consistent: the war must end soon or the economic fallout will worsen. Administration officials, he told the Wall Street Journal, understand the urgency.
The numbers underline why. U.S. airlines spent more than $5 billion on fuel in March alone, a 30% increase from a year earlier, according to government data. The average domestic round-trip economy fare climbed 21% year-on-year to $570 in March, according to Airlines Reporting Corp. Carriers have been raising prices and cutting routes that are no longer viable at current fuel costs, though so far bookings have held up. Sununu cautioned that a Strait of Hormuz reopening would not produce immediate relief, warning that elevated ticket prices should be expected through summer and autumn given how long it takes cost reductions to flow through to consumers.
The war claimed one direct industry casualty in Spirit Airlines, which cited the sustained fuel price surge as a factor that derailed its plan to emerge from chapter 11 bankruptcy after the Trump administration and the carrier failed to agree on federal support of up to $500 million. Budget carriers more broadly have sought $2.5 billion in federal assistance and written to lawmakers requesting tax relief.
The political backdrop is stark. A poll by NPR, PBS and Marist found that 63% of Americans placed a great deal or significant blame on Trump for rising gas prices, with more than eight in ten saying fuel costs were straining their finances. Trump has defended the war’s economic costs, saying earlier this week that higher oil prices were a small price to pay for eliminating Iran’s nuclear capability. But with crude falling below $100 a barrel on Wednesday following reports of progress toward a peace framework, and Iran expected to deliver its response to a U.S. proposal on Thursday, the administration’s urgency to reach a deal appears to be growing by the day.
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The political urgency now openly attached to fuel costs inside the Trump administration adds a new dimension to the Iran peace negotiations, suggesting the White House has domestic electoral incentives to reach a deal well before November that go beyond the purely strategic calculus. For energy markets, the acknowledgement that crude needs to fall meaningfully before the midterms implies sustained pressure on the administration to pursue a diplomatic resolution, reinforcing the bullish case for a near-term deal and the bearish implications for oil if one materialises
