The Toll Was Never the Problem

For eight straight weeks during the ceasefire, US gas prices fell. No Hormuz toll was in place. Then Trump ended the ceasefire. Prices jumped 10 cents to $3.82 a gallon. Diesel hit $4.85. Still no toll. ^[1]

The national average price of gas has seen its first weekly increase since May 11, snapping a streak of eight straight weekly declines, with prices climbing in nearly four out of five states. — Patrick De Haan

Same toll status in both periods. Different war status. Opposite economic outcomes. The variable that changed was the war, and the war alone. Trump built an entire architecture on top of that absent toll. He scrapped the 20% fee and claimed the economic problem was solved.

Prices are way down. Prices are coming way down, and we’re going to bring them much lower yet. — Donald Trump

In its place he demanded something new from Gulf leaders: not per-ship payments but factory and industrial investment in the United States. He made the swap explicit. ^[2]

Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States. — Donald Trump

Meanwhile the military pressure intensified. He ordered a naval blockade on Iranian ports and threatened to widen the target list, sparing only oil installations to prevent global economic disruption. ^[3]

Next week comes the power plants. Next week comes the bridges. We're going to knock out all their power plants. We're going to knock out all their bridges, unless they get to the table and negotiate. — Donald Trump

The architecture is visible in his own sentences: maximize military pressure on Iran, keep economic friction off everyone else. This is a deliberate decoupling, not an accident. It fails on its own terms. The blockade itself, without any toll, is generating the same price shock the toll was blamed for. Brent crude jumped 9.5% on the blockade announcement. US gas is projected to hit $4 a gallon within days. Diesel could reach $5. ^[4]

I now expect the national average price of gasoline to reach $4 per gallon in the next 7-10 days, if not sooner, while the U.S. average diesel price is likely to again reach $5 per gallon by the end of this week, potentially as soon as Friday — Patrick De Haan

The military tool produces the economic damage. The thing the toll was supposed to cause is being caused by the war. The blockade does not even stop Iran. During the four weeks it was being imposed, Iran exported 80 million barrels of oil worth $6 billion. Another 30 million barrels await departure. ^[5]

The Americans, as usual, broke their promise and violated Article 10 of the memorandum of understanding related to the 60-day waivers. — Mohsen Paknejad

The surgical instrument fails on its own surgical terms while still generating the collateral economic damage it was supposed to prevent. Iran's retaliation strikes the very Gulf states Trump is asking to fund American factories. The IRGC hit US Navy radar systems in Bahrain, a US air base in Jordan, and two Emirati oil tankers in the Strait, killing one Indian seafarer. ^[6] Kuwaiti border posts and Saudi offshore rigs were also struck. ^[7]

They shot first, and that was a big mistake that they shot first because we have been knocking the hell out of them. They’re very difficult people. — Donald Trump

The war reaches the partners in the economic deal. The decoupling was supposed to keep the fighting contained to Iran while Gulf money flowed into American industry. Instead, the fighting is landing on the investors. The toll was a thermometer. It measured the economic temperature of a war raging in the world's most critical oil corridor. Trump pulled the thermometer and declared the patient cured. But the blockade is the fever, and you cannot treat one while feeding the other.