Veteran investor Peter Schiff warned Tuesday that crude oil breaking above $90 a barrel could make November midterm voting "much more costly" for Americans. He predicted prices would soon top $100, driving up CPI and bond yields.

Oil Prices and Political Impact

Schiff stated on X that the breakout in oil prices complicates the Federal Reserve's interest-rate decision. He argued that rising costs would weigh heavily on voters heading to the polls on Nov. 3.

"The politics get even worse if the Fed hikes rates in September," Schiff said.

At the time of writing, crude oil traded at $90.558 per barrel, up 0.38%. Brent crude rose 0.67% to $95.288 per barrel.

Diesel Costs and Voter Sentiment

August's national average gas price hit a record $4.056 a gallon. GasBuddy's Patrick De Haan estimated Americans paid $10.51 billion more for gas last month than a year earlier. Utah and Idaho saw per-gallon prices climb by more than $1.60 since the Iran conflict began in February.

A Financial Times report noted rising diesel costs could weigh on Republicans, citing a poll where more than half of American voters disapprove of Trump's handling of grocery and fuel prices.

Prediction markets now assign a 51% chance to Democrats sweeping both the House and Senate in November, up from 26% a year ago, according to Polymarket.

Yields and Fed Expectations

Ross Gerber, co-founder of Gerber Kawasaki Wealth Management, echoed concerns that rising oil and rates could weigh on stocks ahead of the Fed decision.

"Fed is now in play," Gerber said on X. "Not a good set up for the fall."

Schiff previously stated the 10-year Treasury yield's climb toward 2007 levels reflects a structural bear market driven by the U.S. debt load exceeding $40 trillion. Markets now price in roughly a 68% probability of a 25-basis-point Fed rate hike at the Sept. 15-16 meeting.

What the Numbers Show

The divergence between rising fuel costs and political sentiment is stark. While gas prices hit a record high of $4.056, adding $10.51 billion to consumer spending compared to the prior year, prediction markets have shifted significantly toward Democrats. The probability of a Democratic sweep rose from 26% to 51% over the past year, suggesting voters may be penalizing incumbents for inflationary pressures linked to energy costs.

The U.S. Energy Secretary stated that 17 million barrels of oil passed through the Strait of Hormuz on Monday, underscoring the strategic waterway's continued role in global energy flows.

Strait of Hormuz oil transit

The disclosure came directly from the U.S. Energy Secretary, who cited the Monday figure as a measure of activity through one of the world's most closely watched oil chokepoints. The Strait of Hormuz connects the Persian Gulf to the Gulf of Oman and serves as a key passage for crude oil and petroleum products moving from major producing nations to global markets.

The figure reflects the volume of oil recorded on a single day, as reported by the U.S. Energy Secretary. No additional context regarding the period, comparison data, or destination markets was provided in the source statement.