Iran war oil price rise makes affordability bigger issue

November’s midterm elections were always supposed to be about affordability. Then, the bombs began falling in Iran.

The expanding U.S. war in the Middle East threatens to scramble the cost-of-living narrative that has so far defined the contest for control of Congress.

The election, now less than eight months away, will determine whether President Donald Trump retains his iron grip on Washington or spends his last two years in office fending off Democratic congressional majorities.

Both parties have sought to capitalize on kitchen-table issues, as Americans struggle to keep up with the rising costs of ordinary goods and services. The war in Iran now threatens to exacerbate those concerns — and Democrats are seizing on the opportunity to pillory Trump and Republicans for beginning a conflict that could make life even more expensive for ordinary Americans.

“Because there was no plan going in, I think there will be lots of things that are unforeseen consequences of this,” Sen. Martin Heinrich, D-N.M, the top Democrat on the Senate Energy and Natural Resources Committee, said in an interview with CNBC. “I mean you saw how much gas has gone up in a day, oil futures have gone up, there are going to be a lot of knock-on effects.”

Some of those knock-on effects have already been evident. U.S. crude oil has jumped past $90 per barrel, up from $67 the day before the war broke out. The global market index Brent has skyrocketed to more than $90 per barrel. That’s caused gas prices to spike to about $3.38 per gallon, according to a national average from Gasbuddy, up more than 35 cents from the week before the war.

Rep. Jared Huffman, D-Calif., the ranking member of the House Natural Resources Committee, was quick to point out in an interview that liquefied natural gas prices have also spiked. Though U.S. increases have been modest so far, global LNG supply has been squeezed by a shutdown in Qatar, one of the world’s top LNG-producing countries. Natural gas is the largest electricity generator in the U.S., which is critical as the booming data center industry stresses the electric grid and increases utility costs.

“I think what American families have been feeling most acutely for the past year-plus is their energy bills, their utility bills rising,” Huffman said. “A big part of the utility bill increase is that natural gas is getting more and more expensive … a lot of our effort has been pushed into LNG exports instead of strategies that would lower bills for American consumers. That problem is only more amplified by this conflict.”

But a quick operation in Iran is far from certain, and any extended conflict could create an election-year quagmire for Republicans, said Brittany Martinez, executive director at Principles First and a former aide to then-House Speaker Kevin McCarthy, R-Calif.

“If energy prices rise or markets stay volatile, affordability becomes a harder message for Republicans to carry cleanly,” Martinez said. “Republicans will argue that projecting strength abroad prevents greater instability, while Democrats will try to link any sustained price increases to foreign policy decisions. The real question is whether this turns into a prolonged conflict that voters feel in their household budgets.”

Many believe the military intervention in Iran has the potential to drag on, including Sen. Andy Kim, D-N.J., a national security advisor in the Obama White House.

“This administration doesn’t seem to think about this at all,” Kim said when asked about a potential power vacuum keeping the U.S. in the region longer. “The intelligence community has done a whole range of assessments that very much keep me up at night, and the fact that this White House, I assume, read the same things I read and still went through with this, I just find that to be absolutely reckless.”

Complicating matters more for the GOP is that the war in Iran is unpopular. A CNN poll released March 2 found that nearly 60% of those surveyed disapproved of the U.S. taking military action in Iran. That comes as Trump’s economic approval remains underwater: A Fox News poll released March 4 found that 61% of voters disapproved of Trump’s job on the economy.

“We don’t see it as an opportunity, but I do think it’s our responsibility to tell the American people exactly the decision that Donald Trump is making,” said House Democratic Caucus Chair Pete Aguilar, D-Calif. “He’s sending billions of our tax dollars to the Middle East for another war while he’s kicking people off of healthcare and … eliminating nutrition programs.”

Rep. Zach Nunn, an Iowa Republican seeking reelection in a district Cook Political Report with Amy Walter has labeled a “toss up,” said he is not concerned the war could drown out the GOP’s affordability message. He pointed to the sprawling tax and spending bill signed into law last year, increased domestic energy production, and housing legislation that advanced out of the House last month as examples of things the party will use to show action on rising costs.

War in the Middle East does not necessarily preclude Republicans from continuing to try to bring prices down, he argued.

“A more fulsome conversation would be, how do we make sure that we still deliver on affordability?” Nunn said in an interview. “I think this is the absolute right spot for us to be in.”

“We have a president who has campaigned on ending forever wars, and he has jumped into war without justification or explanation to the American people,” said Rep. Suzan DelBene, D-Wash., chair of the Democratic Congressional Campaign Committee.

“So this has been broken promise after broken promise,” DelBene said. “This has been at the expense of the needs of everyday Americans. And I do think voters will hold them accountable in November.”