President Donald Trump’s allies are expressing growing concern that rising oil and energy prices linked to the ongoing Iran war are undermining the administration’s economic message ahead of the midterm elections. The surge in inflation, particularly in energy costs, poses a significant challenge to Republicans seeking to highlight the benefits of tax cuts, deregulation, and tariff policies.

The Iran conflict, which began in late February following U.S. and Israeli military actions, has disrupted global oil supplies by affecting shipments through the Strait of Hormuz. This has contributed to roughly a 50 percent increase in oil prices, which analysts say is fueling broader inflation pressures across the economy. Data released last week showed inflation surpassing 4 percent in May, the highest level in three years, while core prices excluding volatile food and energy categories rose 2.9 percent year-on-year.

E.J. Antoni, chief economist at the Heritage Foundation and a former Trump nominee for the Bureau of Labor Statistics, described the inflation figures as “red hot” and said these energy-driven cost increases are offsetting progress made by the administration’s economic policies. “We’re just in this unfortunate situation where all of the great work that this administration is doing … all of the knock-on effects of the Iran War are simply overpowering,” Antoni said.

Republican strategists are concerned that inflation weakens their ability to tout the economic gains achieved through lowered tariffs, regulatory rollbacks, and tax reforms, especially as they campaign to retain control of Congress this fall. While the administration maintains that the conflict is critical to preventing Iran’s nuclear development and safeguarding U.S. interests, the economic side effects have become a point of political vulnerability.

President Trump downplayed the inflation data, calling the numbers “great” and expressing optimism that oil prices will fall “like a rock” once the war ends. On Sunday, he announced a limited U.S.-Iran agreement aimed at halting hostilities and reopening the Strait of Hormuz, though details remain sparse. Meanwhile, wage growth slowed in May to its weakest pace since 2021, adding strain to household budgets despite steady consumer spending and historically elevated stock markets.

Conservative economists emphasize underlying economic strength. Daniel Kishi, senior policy adviser at American Compass, highlighted the addition of 172,000 jobs in May and an unemployment rate steady at 4.3 percent. Nevertheless, he acknowledged the political costs of the ongoing conflict: “Whatever the objectives of the war in Iran, I think it’s obvious that it does pose near-term political costs.”

Others point to factors such as the AI sector’s growth as contributing to inflationary pressures beyond energy prices. Richard Stern of the Plymouth Institute for Free Enterprise noted that while long-term economic fundamentals look positive, energy prices remain a dominant concern for politicians and voters alike.

The White House offered a more optimistic interpretation of the inflation report, emphasizing that despite temporary disruptions related to Iran, President Trump’s broader economic agenda is “delivering meaningful results.” White House spokesman Kush Desai cited declines in prices for prescription drugs, dairy, and auto insurance as signs of underlying progress.

Trump’s former economic adviser Peter Navarro urged caution regarding interest rate increases, arguing that core inflation remains manageable and that the U.S. is well positioned to handle the energy shock. He pointed to rising petroleum exports and tax incentives fostering manufacturing as mitigating factors, but warned that the situation warrants close monitoring ahead of the Federal Reserve’s June 17 meeting.

Fed officials are reportedly considering further interest rate hikes if inflation does not moderate, putting new Fed Chair Kevin Warsh under early pressure from the administration, which favors lower rates to support economic growth during this politically sensitive period.