Iran War Fuels Record Gas, Beef Prices Amid Recession Fears

As the U.S.-backed military campaign against Iran enters its third month, energy markets are flashing warnings of severe disruptions that analysts say could force fuel rationing within weeks. Oil prices have climbed more than 50 percent since late February, pushing the national average for regular gasoline to $4.52 a gallon, according to AAA data released Monday. JPMorgan analysts now warn that $5 gas could soon reach pumps nationwide if supplies from the Strait of Hormuz remain constrained.

The warnings gained urgency after energy investor Eric Nuttall told Bloomberg on May 1 that the world faces the "largest energy crisis in modern history." Nuttall, who manages a major Canadian energy fund, said demand would need to be curtailed faster than during the COVID-19 lockdowns. "We're not talking months or quarters," he stated. "In the next couple of weeks, you will have to rationalize demand." Two weeks later, those timelines are drawing closer, and the partial closure of the Strait of Hormuz—through which one-fifth of global oil trade passes—has intensified concerns. Iranian retaliatory strikes on Gulf energy facilities have added to the strain.

President Trump responded Monday by calling for a temporary suspension of the federal gas tax, which currently stands at 18.4 cents per gallon for gasoline. In a CBS News interview, Trump said the break would stay in place "until gas goes down" before phasing back in. Energy Secretary Chris Wright echoed the idea on NBC's Meet the Press, saying the administration supports any steps that lower prices at the pump. Yet suspending the tax would require congressional approval, something previous efforts have struggled to secure.

Critics have tied the price surge directly to administration decisions made before the conflict escalated. Author Patrick Tomlinson noted on X that Trump had eliminated electric-vehicle tax credits and rolled back fuel-economy standards "just in time to trigger the biggest global oil crisis since the 1970s." With summer driving season approaching, those policy reversals leave fewer immediate alternatives for consumers facing higher costs.

The administration has dismissed Iranian counteroffers on nuclear issues as insufficient, describing one recent proposal as "very stupid." Meanwhile, refiners are shifting production toward jet fuel to meet global demand, a move that JPMorgan says is tightening gasoline and diesel supplies further. Several Western states already average above $5 per gallon, and analysts say even modest additional disruptions could push much of the country across that threshold.

Ordinary households are already feeling the effects. Higher fuel costs ripple into transportation, food delivery, and manufacturing expenses at a moment when many families are still recovering from earlier inflation pressures. The prospect of rationing, once dismissed as alarmist, now appears in mainstream forecasts tied to the Hormuz bottleneck and damage to regional infrastructure.

Trump's proposed tax holiday offers short-term relief but does nothing to address the underlying supply shock created by the ongoing conflict. With Congress unlikely to act quickly and no clear diplomatic off-ramp visible, drivers face the possibility that prices will remain elevated for months rather than weeks.