Economic Conditions and Consequences of Iran War 9 16 2026
As Donald Trump’s war on Iran escalates, the main straits moving Middle Eastern oil are currently blocked. First Iran blocked the Strait of Hormuz, linking the Persian Gulf to the Arabian Sea. Then, the Yemen rebels, who sided with Iran, shut the Bab al- Mandab, linking the Red Sea to the Arabian Sea.
What this did, in combination with drone strikes cutting off the East West pipeline, was effectively shut down Saudi Arabia’s oil production. Stopping the flow of oil from the pipeline, which would have moved the oil north to the northern Red Sea, from there to the Mediterranean, was stopped by drone strikes from inside Iraq by rebels there.
Unable to move large ships through the Persian Gulf, and now the Red Sea, the price of oil is rising. Diesel is already at $6.13 dollars a gallon, that’s $1.66 a liter. The price is still rising too. It just keeps rising as it gets harder and harder to produce.
We can thank Donald Trump and his Republican bourgeoisie for this. Iran was attacked by Israel and the Americans February 28th 2026, in an aerial bombardment that killed the leadership of Iran. They killed the Ayatollah, and several of his ranking leaders.
They thought Iran would capitulate due to aerial bombing. It was a foolish gambit. Israel was connected, using American f35 planes, the new fighter aircraft to bomb Iran. But Iran was capable of using anti aircraft weapons, and shot down several of them. It is unknown if they took it down and any technology was left.
The Iranians also proved capable of aerial attacks, hitting more than 50 military aircraft, and dozens of military bases the Americans were using in their war effort. These bases were in Bahrain, Kuwait, Jordan, and the United Arab Emirates. The question now is if it is even worth rebuilding them, considering they were vulnerable to attack.
I’m not going to give a body count, but people are dying. They really are fighting, and Donald Trump’s plans for a coup de tet in Iran installing American leadership seems to have failed. Now the cost of Trump’s war is becoming clear, gasoline prices,and conversely, the price of everything else, as gasoline powered trucks, railroads, and ships move the commodities sold in the market.
The inflation is rising, making the price of money higher. The central bank raised the interest rates, as money is becoming more expensive for investors to borrow. Trump has repeatedly said the price of state money should come down, going so far as to remove and attempt to prosecute Jerome Powell, who refused to lower interest rates.
But in reality the central bank does not control the rate of interest. That is governed by economic conditions, in this case inflation pressing against the interest rate. A rate of interest, a measure of financial capital’s surplus value rate, measured against inflation must be higher than inflation or no one would invest in this financial capital. Inflation interferes with the profit rate. It makes it fall, as the value of everything rises. Thus the central bank has thus raised interest rates in response to a lowering of profit from financial capital, a direct result of Trump’s embarrassing failure to control Iran.
The Republican bourgeoisie has done this to themselves. In the process the rest of the country has come with, and it is costing tens of billions of dollars. It is likely the national debt will increase again, as this occurs when countries declare war. It is that or raise taxes, which can also occur but for obvious reasons is unpopular. The answer is to indebt the nation, then pay it back after victory.
Trump thought Iran would give in, and money would come from the imperialist effort to effectively colonize Persia. It worked in Iraq, I guess they thought it would work again. It didn’t work so well in Afghanistan, resulting in an expensive failure after 20 years of all out war. Perhaps they thought this would help pay off the debt from this?
Well now that we see Trump’s failure, and his bourgeoisie, elections are coming in November. Will suffrage treat Trump favorably? It’s his fault Iran was attacked. They did not bomb an Army base, or even kill an American over there. They totally just attacked Iran because they could, and they looked weak.
It turned out they weren’t, will suffrage reward Trump’s party with seats in November? The price tag is already starting to form, with the price of gasoline one of the first effects. They could ban the export of Diesel, but that is not capitalism. It is a subsidy to the companies producing oil; if they could sell it on the market it would cast more, which will hit profits. The oil companies are the last people we should expect to lower prices out of the goodness of their hearts. I suppose they could be forced to sell diesel at below market prices, at a loss. But more likely would be compensation paid to the companies, a state subsidized product of petroleum.
And after it is done with, the price of oil will fall, no longer requiring subsidies? Another assumption which is difficult to make. One thing that is clear is subsidizing the price of gasoline is not capitalism. Tariffs also challenge market economies, free trade is usually something market economies strive for. Trump could subsidize fuel, but again it has a price. Given taxes would pay for it, everyone will pay eventually. Indebting it only adds an interest rate to the money; it costs even more to pay for the debt than if you just raised that amount.
Come November we may see just how intelligent the proletariat is. The opposition party, the radical democrats, could gain control of the House of people would not vote for Trump’s party the Republicans. It would be a defeat of his economic program. Recognition of the fact the price of gasoline and everything else is rising due to his economic and political activities as leader.
Or things could work out for Trump, Iran could give in, and Don could expropriate the oil for his imperialism needs.
The latter looks unlikely, and the question becomes will the Democrats who may inherit Don’s war will continue it. They already voted in Congress for it to end.
A day of reckoning may be coming. It depends on if suffrage can control the reactionary bourgeoisie. If it can, it will be a historic victory for the American workers.
Nicholas Jay Boyes
Milwaukee Wisconsin
American Democratic Republic
9 16 2026
