Trump faces midterm fuel reckoning as gas prices near Biden's average

In his 2024 presidential campaign, Donald Trump made the cost of energy a centerpiece.

He blamed President Joe Biden’s environmental policies while vowing to slash gasoline prices to below $2 a gallon. That would herald an economic golden age of low fuel costs at home and U.S. “energy dominance” overseas, he said.

Fast forward to the present and the upcoming midterm elections, and energy is once again in the spotlight. But this time it’s Trump who’s on the defensive.

Gasoline prices did moderate early in Trump’s second term. But they’ve surged this year as the Iran war, which he launched alongside Israel in February, disrupted global fuel supplies and left stockpiles stretched thin.

That’s put Trump on the verge of an embarrassing milestone: Right now, the average price of gasoline during his second term is just days away from surpassing the average under Biden. It’s a glaring example of how energy, which the president has put at the center of his agenda, has turned into one of his biggest political liabilities.

Two years after Trump took office again, gasoline prices are up almost 40% to more than $4 a gallon, diesel costs 74% more and electricity prices have increased about 15% nationwide. Far from the relief voters had sought, the average cost of gasoline under Trump’s second term will likely overtake the $3.47 average under Biden by the Nov. 3 election. (Biden still holds the record for the single-highest nationwide gasoline price of $5.02 a gallon in June 2022.)

“People were hoping to vote for something that would lead to lower prices, but that change has not materialized,” said Karen Clay, a professor of economics and public policy at Carnegie Mellon University. “It looks like prices have gone up, at least in part, because of the activities of the U.S. government.”

Trump’s war with Iran and his failed attempts to end the conflict have made it easy for voters to pin the blame for high energy prices on his party. And as data-center development stokes concern about rising power bills, the president’s support for artificial intelligence is also creating headaches for Republicans, who risk losing control of the House and Senate in the midterms.

“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 of Washington consulting firm ClearView Energy Partners.

The Trump administration has taken steps to reduce the impact of fuel supply disruptions from the Iran war, including a temporary waiver to allow nationwide sales of gasoline blended with 15% ethanol, according to a White House official. The administration also issued a waiver of the Jones Act, a law that requires goods shipped between American ports to be built, owned and crewed by Americans.

“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.”

But in a sign of how much fuel costs are weighing on voters’ minds, some 74% of respondents to a Pew Research Center survey this month said they were “very concerned” about the price of energy, exceeding worries about healthcare, housing and the job market. The same figure was only 43% before the conflict with Iran began.

High energy costs threaten to turn solidly red areas of the U.S. into swing states. Kansas, Iowa, Ohio, Texas and Alaska, which Trump won by double-digit margins in 2024, are now considered toss-ups for Senate races by the Cook Political Report, a nonpartisan election forecaster. Households in each of these states, with the exception of Texas, spend more of their income on energy than the U.S. average, according to James West, a managing director at Melius Research LLC.

“It’s perceived that the Iran conflict is what’s causing this,” he said in an interview. “Oil prices, even post conflict, will remain elevated.”

Republicans running for office in these battleground states are under pressure to show that they have plans to address voter concerns about costly energy.

“Iowans are being squeezed and shouldn’t have to foot the bill at the pump or the checkout line for the war in Iran,” Ashley Hinson, the state’s Republican candidate for Senate, said last month as she appealed for the suspension of gasoline taxes.

Her opponent, Democrat Josh Turek, said rising costs are the “number one issue” in the race, blaming Hinson for supporting Trump. “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,” he said at a campaign event last month.

Roger Marshall, the Republican Senate candidate in Kansas, called the cost of gasoline “absolutely the barometer for this election” in an interview on WABC radio in June. Prices have increased 10% since then.

And Ken Paxton, a Republican running for Senate in Texas, told donors and lobbyists that fuel costs were a major drag on his campaign, Axios reported. “People are feeling the pinch,” he said in a recording obtained by the news outlet. “It’s the war, it’s gas prices, it’s diesel.”

Stubbornly high fuel prices are worse for the economy than discreet items like eggs or cars because of their ripple effect on other goods throughout the supply chain. They are being baked into inflation expectations, lifting bond yields and prompting the Federal Reserve to raise rates to try to cool consumer demand.

As a result, the average 30-year mortgage rate has surged to 7.5% from just over 6% before the war with Iran, reversing a downward trajectory since 2023. This makes home ownership, a central pillar of the American dream, more difficult at a time when the cost of healthcare, airline tickets and groceries is rising. Annual inflation is 3.7%, compared with 2.4% before the war.

Facing mounting voter anger, Trump has announced a flurry of measures to keep a lid on energy prices in recent weeks.

The administration allowed wider use of tax-exempt diesel, pressured G7 allies to release stockpiles of the fuel and struck a deal with Vladimir Putin for more supplies. It also pledged to expand a refinery in Texas with taxpayer funds, finance electrical infrastructure growth and endorsed the Ratepayer Protection Act to help shield consumers from power costs associated with large data centers.

In late August, the Trump administration announced a blockbuster deal to take majority control over a huge amount of Venezuela’s oil wealth, the latest move by the president to establish U.S. dominance over the Western Hemisphere. But the success of the agreement is riding on fields that are aging, degraded or expensive to access.

In every electoral cycle, incumbent administrations are “blamed for things that maybe aren’t their fault,” said Clay of Carnegie Mellon. “But in this case there are substantive reasons to believe the actions of the U.S. government have translated into higher prices.”

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(With assistance from Ari Natter, David Wethe, Will Kubzansky, Nathan Risser and Jennifer A. Dlouhy.)