President Donald Trump stated on Friday evening that he will "never apologize" for the average price of gasoline rising above $4 per gallon. Speaking at a rally in Garden City, New York, Trump linked the higher energy costs to geopolitical strategy, asserting that the price increase prevents a "very evil country" from acquiring a nuclear weapon.

"For you to pay a tiny little bit more for your gasoline, just remember you’re doing it so that a very evil country cannot have a [nuclear weapon]. So remember that when you have to pay a little bit more, you’re at $4. It’s OK," Trump said.

Energy Price Surge

The current pricing environment contrasts with Trump’s campaign pledges in August 2024, when he promised to reduce energy prices by 50% and bring gasoline below $2 a gallon. Instead, prices have surged during the ongoing conflict with Iran. According to AAA data, the national average gasoline price has risen to $4.07 per gallon, an increase from $3.88 last month. Diesel prices have also climbed sharply, reaching $5.40 per gallon compared with $4.98 last month.

Higher energy prices have contributed to elevated inflation in the US, prompting some Federal Reserve officials to advocate for higher interest rates. Data released this week shows that the US Consumer Price Index (CPI) slipped to 3.4% in July from 3.5% the previous month. Excluding volatile food and energy prices, inflation stood at 2.5% in July, remaining above the Federal Reserve’s target of 2.0%.

Geopolitical Stalemate

Gas prices are expected to remain at elevated levels as the US-Iran conflict enters a stalemate. The Memorandum of Understanding (MoU) signed in June has expired, and Iran has adopted a hardline stance regarding the reopening of the Strait of Hormuz. Tehran has demanded reparations, the unfreezing of its assets, and the lifting of sanctions.

The US is shifting toward an economic response amid dwindling ammunition supplies and reported morale issues aboard the USS Lincoln. Treasury Secretary Scott Bessent stated that the US would impose tougher sanctions to force Iran back to negotiations. However, Iran, operating in "survival" mode, appears unlikely to yield. Iran’s Deputy Foreign Minister emphasized that the strait would be opened or closed only under Iran’s command, citing continued enforcement of the blockade until the US accepts defeat.

Traffic through the Strait of Hormuz has slowed further following attacks on ships attempting to cross. The UAE reported attacks on Friday, highlighting the strategic importance of the waterway for global energy markets. Iran aims to prolong the war to exert pressure on the US as President Trump’s approval ratings decline.

The ongoing conflict between the United States and Iran presents President Donald Trump with a complex strategic dilemma, as experts warn there is no clear path to an immediate resolution. While kinetic action has paused, no formal ceasefire has been announced, leaving the possibility of resumed hostilities open. Iran has leveraged its position by demanding the end of the blockade, reparations for damages, the release of frozen assets, and the withdrawal of US military forces from the region before it agrees to reopen the Strait of Hormuz.

According to University of Chicago experts Robert Pape and John Mearsheimer, the administration’s options are constrained by both military logistics and geopolitical realities. The absence of a ceasefire means that any diplomatic progress remains fragile, with Iran asserting a stronger negotiating stance due to its control over critical maritime chokepoints.

Escalation Risks

One potential path is further military escalation, a strategy Trump has previously signaled by threatening strikes on Iranian infrastructure such as power plants and bridges. However, this option faces significant logistical hurdles. Reports indicate that Gulf allies, including Saudi Arabia and Kuwait, are depleting their defensive weapon stocks. Simultaneously, the US is facing shortages of sophisticated defensive and offensive munitions. A ground invasion, potentially aimed at capturing an island, could result in increased US casualties without achieving decisive strategic goals.

Abandonment Strategy

Alternatively, the US could attempt to abandon the war while claiming victory, citing the destruction of Iranian weapons factories and the killing of senior officials, including Ayatollah Ali Khamenei. This approach carries substantial political risks. Critics from neoconservative circles and the Israeli lobby in Washington are likely to oppose any withdrawal. Furthermore, abandoning the conflict could leave Iran in control of the Strait of Hormuz, allowing it to generate billions of dollars annually through tolls.

Return to Negotiations

A third option involves returning to negotiations, using the Memorandum of Understanding (MoU) as a baseline. However, trust remains a significant barrier; Iran has been bombed three times during previous negotiation rounds—in June last year, on February 28, and again in July. Consequently, Iran is likely to demand a complete ceasefire in Gaza and Lebanon, along with immediate financial resources from the United States, before engaging in substantive talks.

What the Numbers Show

The strategic landscape is defined by resource constraints and geopolitical leverage rather than traditional financial metrics. The depletion of defensive weapons among Gulf allies and the US highlights the logistical limits of prolonged kinetic engagement. Meanwhile, Iran’s potential to charge billions of dollars in tolls at the Strait of Hormuz underscores the economic stakes of maintaining or withdrawing military pressure.