In the Iran War, Both Governments Are Now Paying Their Own People to Hold Out

President Trump has attached the end of the Iran war to an American election.

the war is going to end immediately after the election because [Iran] can’t hold out longer. — Donald Trump

Iran's central bank governor, Hemmati, has drawn a distinction, and the distinction is his government's whole theory of survival.

enduring hardship is very different from collapse and what the US is after — Abdolnaser Hemmati

Both theories of victory put the decisive front in the other country's households. Seven months in, each government has begun paying its own public to endure the war, which is the clearest proof that each believes its own doctrine. The tools come from the same drawer of emergency measures — rationing, cash handouts, price controls, export bans — opened in two capitals under wildly different arithmetic. The attrition has opened a second front, and it runs through each government's treasury. Washington's drawer opens onto numbers Americans can read at the pump. Diesel hit a record national average of $6.32 a gallon, up more than 60 percent since February, with California above $8 and some stations maxing out their displays at $9.99 ^[1]. The spike landed on the harvest. Farmers across the Midwest report daily expenses up $1,000 to $1,500. The Nebraska Trucking Association warns that small fleets and owner-operators may not survive. A food bank has started shifting money out of its food budget and into fuel ^[2]. The president's stated position is that the country has accepted the cost.

Americans are willing to pay more to prevent Iran from obtaining a nuclear weapon. — Donald Trump

On top of that acceptance, the drawer has been filling. Trump has promised $5,000 payments to every American adult, conditional on Republicans keeping their congressional majority — endurance priced to the same electoral clock he applies to Tehran ^[3]. Treasury Secretary Scott Bessent has doubled a bond-buyback program, the Treasury repurchasing its own older debt to lift bond prices and push long-term interest rates down, and has said plainly that that is the point ^[4]. And the administration has considered banning diesel exports to keep more fuel at home, a step Senate Majority Leader John Thune is now open to ^[5][2]. A caveat before Tehran: the diesel spike has several authors. The Hormuz war shares the work with Ukrainian drone strikes on Russian refineries, Russia's own diesel export ban, and the Iran-aligned Iraqi militia attack that disabled Saudi Arabia's East-West pipeline ^[1][6]. Trump has nonetheless settled on a different author.

Zelensky has to do one thing. He has to stop knocking out diesel fuel in Russia. — Donald Trump

Tehran's drawer holds the same tools at another order of magnitude. Gasoline is rationed against a 15-million-liter daily shortfall, inflation runs at 66 percent, food prices are up 128 percent, and the rial has crashed past two million to the dollar, a slide that began with January's Ayandeh Bank collapse ^[7][8]. The American naval blockade has collapsed Iran's seaborne exports and disrupted seven of every ten of its basic imports, and the overland detours through Russia, China and Turkey cost four times what the sea lanes did ^[9]. When protests met that arithmetic, the crackdown killed more than 2,400 people in a fortnight, and President Pezeshkian's answer was the same instrument Washington reached for: monthly cash payments to citizens ^[8][9]. The difference between the two drawers is the difference between discomfort and destitution. Washington is paying its public to keep buying fuel at record prices; Tehran is paying its public to accept not having it. Publicly, each government promises the other breaks on a schedule. The schedules officials describe behind closed doors run much longer: Vice President Vance and Secretary of State Rubio are reported to have privately warned that the conflict could persist until 2029 ^[1]. Tehran's own clock-tellers are no more certain. President Pezeshkian and Iran's parliament speaker, Ghalibaf, have both called for ending the war, and police commanders put fuel shortages and unemployment at the top of the list of what sets off nationwide unrest ^[7]. Even the loudest clock in the war wobbled inside a single day ^[10].

I hoped an end to the seven-month Iran war was near — Donald Trump

Talk, too, comes out of the drawer. The promise of an ending is itself an instrument. It is an old instrument — July's oil-price drop ran on deal rumors that Tehran immediately denied ^[11] — and it works only while the ending never quite arrives. The collision those clocks produced inside Washington became official this week. Bessent's doubled buybacks did not hold the line: the rate on the ten-year Treasury bond reached its highest level since 2023, and average 30-year mortgage rates their highest since 2025 ^[4]. Then the Federal Reserve raised its benchmark rate by a quarter of a percentage point on Wednesday, its first increase since mid-2023, with Chairman Kevin Warsh tying the move explicitly to energy-driven price pressures from the Iran war ^[10]. The backdrop was August inflation accelerating to 3.4 percent, gasoline up 3.9 percent in a single month, with the economist Justin Wolfers tying the widely expected hike directly to the administration's Iran policy ^[3]. Two arms of one government now point opposite ways: the Treasury spending cash to hold long-term rates down, the central bank raising the price of money explicitly because of the war. Neither has prevailed yet — markets took the hike calmly, stocks rose, and the ten-year rate settled back toward 4.96 percent ^[10]. Most of the world has been in this drawer since March: Britain put £53 million toward rural households, Brazil abolished its federal diesel tax, Australia released oil reserves, Hungary imposed hard price ceilings, Greece capped profit margins for three months, and Germany restricted petrol stations to one price increase a day ^[12]. The surge respects no borders — Ontario's diesel is headed for an all-time high of its own ^[13]. Greece's development minister drew the line the whole toolkit circles.

Profits are legitimate but profiteering is not — Takis Theodorikakos

The trading houses sit outside every one of these arrangements, and this week delivered their numbers. As Brent crude, the global benchmark, topped $100, the private firms that move the world's physical oil reported record profits: TotalEnergies' trading arm booked $500 million in overperformance betting that prices would rise, Trafigura's net profit surged 173 percent in a year, and Vitol, Mercuria, BGC Group and Marex all reported booms of their own ^[14]. They are the only balance sheets in this war economy with no public to reassure and no subsidy line to fund. Their entire position was the wager that the pain would persist. Seven months in, that is the only bet in this war that has paid out exactly as placed.