Energy & Environment Newsletter

US and Iran hold economic standoff

by Rachel Frazin - 04/29/26 7:05 PM ET

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by Rachel Frazin - 04/29/26 7:05 PM ET

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Energy & Environment

The Big Story

US and Iran hold economic standoff

The economic front in the U.S. war against Iran is reaching a crisis point for both sides, as negotiations on an end to the war remain deadlocked over Iran’s nuclear program.

Iran’s stranglehold on the Strait of Hormuz has sent average U.S. gas prices to their highest average point since the war started – about $4.23 per gallon – as President Trump’s approval ratings continue to plummet.

But the president and his top officials are stressing that Iran is running out of storage capacity for its oil and gas while under a U.S. blockade, and must accept U.S. terms for ending the war.

“We are in an economic waiting game and I think both sides think they can outlast the other,” said Kristian Coates Ulrichsen, fellow for the Middle East at Rice University’s Baker Institute.

How long both countries can weather the economic shocks will be a major factor in what a peace deal eventually looks like, or whether the countries return to open warfare.

“Undoubtedly the pressure on Iran and its difficulties are not even comparable with the U.S. The U.S. economy is strong, it’s doing fine,” said Adnan Mazarei, nonresident senior fellow with the Peterson Institute for International Economics.

“There is pressure on [U.S.] prices and those will cause difficulties and those will have political consequences for the Trump administration.”

Read more here, from The Hill’s Laura Kelly and me.

Welcome to The Hill’s Energy & Environment newsletter, I’m Rachel Frazin — keeping you up to speed on the policies impacting everything from oil and gas to new supply chains.

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