Trump's Iran War Just Became His Economy's Biggest Enemy

Monday, March 9, 2026 is going to appear in economic history textbooks. Not for anything markets had planned. Not for any earnings report or Federal Reserve decision. For a war - and for one man's phone calls.

By mid-morning New York time, crude oil had surged to $120 per barrel, a price last seen only in the most acute phases of previous Middle East crises. The Dow Jones Industrial Average was shedding hundreds of points. Shipping executives were calling emergency meetings. Airline hedging desks were in full crisis mode. According to multiple financial analysts cited by BBC News, it was "the most volatile day of oil trading in world history."

Then Donald Trump picked up the phone.

Over the course of several hours on Monday, the president personally called reporters from the New York Post, CBS News, and other outlets. "I have a plan for everything, okay?" he told the Post. "I have a plan for everything. You'll be very happy." Oil dropped. The S&P 500 bounced. Then, by evening, Trump was walking back his own soothing words - and markets braced again.

This is the economic whipsaw that the Iran war has become. And ten days into the US-Israeli operation against Tehran, there is no sign the volatility is ending.

A Day That Set Records Nobody Wanted to Set

The session began before US markets even opened. Overnight strikes continued across Iran, the Strait of Hormuz remained functionally closed to normal tanker traffic, and Mojtaba Khamenei - the new Iranian Supreme Leader whose very appointment Trump had called "unacceptable" - was now issuing orders to IRGC commanders. Gulf state governments reported fresh ballistic missile and drone attacks overnight.

By the time trading opened in New York, Brent crude was already above $110. The price of $120 came shortly before noon Eastern time, according to Bloomberg commodity trackers. At that level, economists warned that American consumers would see gas prices approaching or exceeding $5 per gallon within days in high-cost states.

Stock indices followed. The Dow fell sharply. Airline stocks, which depend on jet fuel priced off crude, were among the hardest hit. Industrial stocks followed. The S&P 500 sat on the edge of what analysts call a "technical correction" territory - a 10% drop from recent highs.

"What we're seeing is markets trying to price in an open-ended military conflict with no stated end condition and a closed chokepoint carrying 20% of global oil supply," one energy economist told the Financial Times on Monday. "There's no model for this. The range of outcomes is enormous."

The Strait of Hormuz remains the epicenter. Iran has threatened to "set fire" to any vessel transiting the waterway, and has backed that threat with action. In the past week alone, the UAE reported 238 missiles and 1,422 drones launched against Gulf shipping and infrastructure. Bahrain's largest oil refinery caught fire after a drone strike on Monday, the single-highest civilian casualty incident in the Gulf since the war began, with 32 people injured according to BBC reporting.

Iran's campaign to disrupt Gulf oil infrastructure has produced what economists call an unprecedented supply shock. (Unsplash)

Trump on the Phone: "I Have a Plan for Everything"

The president's intervention was notable both for its speed and its content. Trump apparently recognized that the market movements were becoming a political problem in real time, and he did what he does - he picked up the phone and started talking.

The full sequence of his statements on Monday, reconstructed from reporter accounts cited by BBC News and the New York Times, represents a masterclass in contradictory messaging:

"We're very far ahead of schedule." When asked if the operation could therefore end soon: "I don't know, it depends. Wrapping up is all in my mind, nobody else's." - President Trump, to CBS News, Monday March 9

"We could call it a tremendous success right now. Or we could go further. And we're going to go further." - President Trump, later the same evening

Within hours of his soothing morning comments - during which oil dropped back below $90 - Trump was warning that the US would "hit them so hard that it will not be possible for them or anybody else helping them to recover that section of the world" if Iran continued to threaten oil tankers.

This is not a communication strategy. This is improvisation under pressure. And the markets know it.

Just days earlier, Trump had said the war would not end without Iran's "unconditional surrender." Monday's comments suggested something closer to declaring victory and going home. By evening, that framing was gone too. Defense Secretary Pete Hegseth, meanwhile, gave a CBS interview Sunday saying the US hasn't "even really begun" using conventional gravity bombs - 500, 1,000, and 2,000-pound munitions - and described a coming escalation phase.

"Trump says it's 'very complete.' Hegseth says we haven't started the hardest part," one senior Republican congressional aide told Politico. "Both can't be right."

The Numbers That Will Define the Midterms

The political stakes are not abstract. They are written in the economic data released last Friday - data that landed like a stone in Washington.

The Bureau of Labor Statistics reported that the US economy lost 92,000 jobs in February 2026. Unemployment ticked up to 4.4%. The labor force participation rate fell to 62% - the lowest reading since December 2021. None of these numbers exist in isolation from the Iran war, which began February 28 and immediately began disrupting energy markets, supply chains, and business confidence.

Gasoline prices tell the story most viscerally. The national average price of a gallon of gasoline stood at $3.48 as of Monday - up 48 cents from exactly one week earlier, according to American Automobile Association data cited by BBC. That is one of the steepest single-week increases in US history outside of hurricane-related supply disruptions.

Cost of living and affordability consistently rank as the top concerns in American political polling - above immigration, above crime, above foreign policy. Trump won the 2024 election in significant part on a promise that he would bring prices down. He explicitly ran against Biden-era inflation. The Iran war, which he chose and owns, is now producing its own inflation shock.

The irony is acute. The president who promised energy dominance and lower gas prices through aggressive production is now presiding over $120 oil because of a military operation he ordered. The administration argues the elevated prices are temporary - that once the Strait of Hormuz reopens and Iranian oil infrastructure is neutralized, global supply will normalize. That argument requires the war to end on a timeline that nobody can currently project.

American gasoline prices rose 48 cents in a single week - one of the steepest weekly increases outside of natural disaster disruptions. (Unsplash)

Georgia Votes Today: The First Electoral Test

The political reckoning has its first electoral test today, March 10. Voters in a northwestern Georgia congressional district are casting ballots in a special election to fill a seat recently vacated by former right-wing firebrand Marjorie Taylor Greene, who resigned to become Trump's Secretary of State.

The district is solidly Republican by registration and history. In any normal environment, the Republican candidate would win comfortably. This is not a normal environment.

Democratic candidate Shawn Harris, a farmer and retired brigadier general, is explicitly running on the war and its economic costs. "Because gas prices are going up, everything's going through the roof, and it's not because of something else, it's something that we chose to get into," Harris told BBC News on Monday. "I think I'm going to pick up more voters simply because we're into a war. And oh by the way, those voters got sons and daughters in the war."

The reference to American casualties matters. The Department of Defense has confirmed seven US service personnel killed since the operation began February 28. That number is expected to rise as the conflict enters what Hegseth described as a more intensive phase.

Republican strategists acknowledge the Georgia race is closer than it should be. An internal Republican poll, referenced in a Politico report Monday, showed the GOP candidate's lead had narrowed by six points since the war began. A two-week-old operation has already moved a poll by six points in a safe Republican seat. November is eight months away.

Senate Majority Leader John Thune has acknowledged the political difficulty. Republicans gathered in Miami this weekend for a party retreat where they had hoped to focus on economic messaging - tax cuts, domestic energy production, deregulation. Instead, the Iran war dominated every conversation. "We need to be talking about the economy," one House Republican told the New York Times anonymously. "We can't get a word in edgewise."

Mojtaba Khamenei: Trump's Worst-Case, Now in Charge

Adding to the political and strategic complexity is the leadership situation inside Iran itself. Mojtaba Khamenei, 56, the second son of the assassinated Supreme Leader Ayatollah Ali Khamenei, was selected by Iran's Assembly of Experts - 88 Shia Muslim clerics - to succeed his father. The selection came after Israeli strikes killed the elder Khamenei in the opening hours of the war on February 28.

Trump had been explicit: Mojtaba Khamenei was "unacceptable" as a successor. "Won't last long," the president warned after the appointment was announced. Israel's Defense Minister Israel Katz called him "an unequivocal target."

This threat may have the opposite of its intended effect. Mojtaba Khamenei is a deeply ideological figure - a former IRGC member who joined the Revolutionary Guards straight out of high school before religious study in Qom. He is, by all available reporting, even more hardline than his father. He is also now personally motivated by revenge: the Israeli strike that killed his father also killed his mother, his wife, and a son, according to BBC Chief International Correspondent Lyse Doucet.

"This war is no longer just a political fight; it's intensely personal," Doucet wrote. "It's also about revenge."

The IRGC - which Mojtaba Khamenei has been aligned with for decades - has pledged loyalty "until their last drop of blood." State television broadcast footage of missiles fired in his name, with "At your service, Seyyed Mojtaba" written on their sides.

Iran's hardliners have consolidated. Reformists are sidelined. The new leadership is entrenched, motivated, and ideologically committed to seeing the confrontation through. This is the adversary the US-Israeli coalition is now facing as it considers whether to escalate further.

The Humanitarian Ledger: 1,205 Civilians and Counting

Behind the market data and the political calculations sits a human cost that keeps growing. According to the US-based Human Rights Activists News Agency, cited by BBC Verify, 1,205 Iranian civilians have been reported killed since February 28. Seven American service members have died. Four people were killed in Israeli strikes on Beirut. Thirty-two Gulf civilians were injured in a single Bahraini drone attack on Monday alone.

The Minab incident remains particularly damaging for the US position. On February 28 - the first day of strikes - a US Tomahawk missile hit a military base in the southern Iranian city of Minab. Adjacent to that base was a girls' primary school. Iranian authorities reported 168 people killed, including children. BBC Verify analysis of satellite imagery confirmed the strike sequence, showing the IRGC base "completely flattened" and the school building "partially collapsed." The New York Times reported that photos of missile fragments posted by Iranian state media "have the markings of a missile made by American manufacturers."

"I honestly don't like it at all. I understand they needed help, but couldn't we have found another way to do this?" - Angie, recently retired nurse, northwestern Georgia, to BBC News

The administration has not disputed the US origin of the Minab weapon. IDF spokesman Lt Col Nadav Shoshani said Iranian oil facilities were "a legal, military target" - a defense that does not address the school. The civilian death toll and images from Minab circulate widely on social media, including in the United States, shaping the domestic political environment in ways that administration messaging cannot fully counter.

The RAF has now confirmed shooting down additional Iranian drones - two more as of Monday, according to Defense Secretary John Healey's statement to Parliament. The Royal Navy warship HMS Dragon is deploying to the Mediterranean within "the next couple of days." Britain is now operationally engaged, deepening the alliance commitment and extending the conflict's geographic reach.

Anti-war sentiment is growing inside the United States, particularly among voters in states with military families. Polls show majority opposition to the Iran operation. (Unsplash)

What Happens to Oil If the War Runs Long

The core economic question is one that neither the White House nor energy markets can answer with confidence: how long before Strait of Hormuz traffic normalizes?

NYT correspondent Brad Plumer, citing multiple energy economists, wrote Monday that oil prices "will likely persist" at elevated levels "until traffic through the Strait of Hormuz returns." That is not a near-term prospect under current conditions. Iran has demonstrated both the capability and the intention to sustain its campaign against Gulf shipping. Even with its air force degraded and its navy reduced - BBC Verify confirmed at least 11 Iranian naval vessels damaged or destroyed - the country retains significant drone and missile stockpiles.

Twenty percent of the world's oil and gas transits the Strait of Hormuz. That is not a number that can be quickly rerouted. Saudi Arabia has alternative pipeline capacity to the Red Sea, but that route carries its own security risks. The US Strategic Petroleum Reserve exists as a buffer - and the administration has signaled it may tap it - but reserve releases historically provide temporary relief measured in weeks, not the sustained supply restoration that would bring prices back to pre-war levels.

For American consumers, the arithmetic is blunt. At $120 oil, gas prices in states like California, already above $5, push toward $6. Food prices follow, because fertilizer is petroleum-derived and trucking runs on diesel. Airline ticket prices surge. Home heating oil - a particular concern for northeastern states entering late winter - becomes a budget emergency for lower-income households. UK Chancellor Rachel Reeves announced Monday that Britain's government would convene an emergency meeting Wednesday to "explore ways to help households" with heating oil bills, per BBC reporting.

Trump has promised these price spikes are temporary. The promise requires the war to end. The war has no stated end condition. That gap - between the promise and the reality - is where the political damage accumulates.

Eight Months to November: The Clock Trump Cannot Stop

American midterm elections are scheduled for November 2026. Control of the House and Senate are both in play. Republicans hold slim majorities in both chambers. Losing the House would mean divided government and the effective end of Trump's legislative agenda for the remainder of his term.

The political math is straightforward and brutal. Voters who care most about cost of living - which polls consistently show is most American voters - are experiencing a sudden and sharp deterioration in conditions that they can directly attribute to a presidential decision. The price at the gas pump is not abstract. It is visible every few days. It generates anger that is easy to direct.

Trump's allies argue the counternarrative: that a successful end to Iranian nuclear ambitions and regional destabilization is worth short-term pain. That argument works if the war ends quickly and cleanly. The appointment of Mojtaba Khamenei - a hardliner committed to revenge - has made a quick, clean ending significantly less likely.

"The war's price, measured in damage to the economy and in political costs to Trump, is still coming into view," BBC North America correspondent Anthony Zurcher wrote Monday. That framing is almost certainly an understatement. The price is coming into view very fast, with eight months left on the clock, and it is larger than anyone in Washington was prepared to pay.

Georgia votes today. The result will be the first piece of real data about what the Iran war is doing to American politics. Whether it is a warning shot or the first salvo of a larger Republican collapse is a question that will not be fully answered until November - but the direction is already becoming clear.

The most volatile day in oil trading history was not the last volatile day. It was probably just the most visible one so far.