President Donald Trump said he has no regrets about the U.S. war with Iran and would make the same decision again, even as diesel prices surpassed $6 a gallon for the first time and a renewed surge in oil prices pushed Treasury yields toward multiyear highs.
"I don't believe in the word 'regret.' You can always question yourself a little bit," Trump told Fox News host Laura Ingraham in an interview broadcast Thursday. "If I had to do it again, I would do exactly as I did." Reuters reported the remarks, which came as the economic effects of the conflict have become an increasingly prominent issue ahead of the November midterm elections.
Trump said preventing Iran from obtaining a nuclear weapon justified his decision. "I don't think they're demoralized. I think they're very proud of the fact that I'm not letting Iran have a nuclear weapon," he said, dismissing suggestions that some supporters had become discouraged by the war.
Iran doesn't possess a nuclear weapon and says its uranium-enrichment program is peaceful. Trump has repeatedly said U.S. military action destroyed Iran's nuclear capabilities, though the current war began months after earlier U.S. strikes against Iranian nuclear facilities.
The economic backdrop has deteriorated as the conflict has disrupted energy supplies. The national average price of diesel reached $6.06 a gallon Friday, roughly 60% higher than when the U.S. and Israel began attacking Iran on Feb. 28, according to AAA data cited by The New York Times. Regular gasoline averaged about $4.30 a gallon.
Diesel carries an unusually broad economic footprint because it powers trucks, farm equipment, trains and other heavy machinery used to move and produce goods. Refineries in the U.S., Europe, Africa and Asia have increased production, but supplies remain constrained by Middle East disruptions and Ukrainian attacks on Russian refineries.
"The cost of diesel gets into just about everything. From running a farm ... [to the] cost of food, but also everything across the economy that's shipped," KPMG Chief Economist Diane Swonk said in a recent interview. When diesel rises, she added, everything "gets that extra fee tacked onto it."
Oil prices added another source of pressure Friday. Brent crude briefly climbed above $110 a barrel before retreating toward $106, while West Texas Intermediate traded around $101. In normal conditions, roughly one-fifth of the world's crude passes through the Strait of Hormuz, where Iran has sharply restricted shipping since the war began.
Concerns have spread beyond Hormuz. Yemen's Iran-aligned Houthis have expanded their control around the Bab el-Mandeb Strait, another major shipping route connecting the Red Sea with the Gulf of Aden. Reuters reported Thursday that Houthi forces had reached the Hanish Islands after taking the port city of Mocha, increasing concerns about shipping through the waterway.
Separately, satellite imagery and NASA fire-detection data have raised questions about possible new damage along Saudi Arabia's East-West oil pipeline, a critical route that allows Saudi crude to reach the Red Sea without passing through Hormuz. Reports of damage hadn't been independently confirmed by Saudi authorities as of Friday.
Saudi Arabia's Energy Ministry said in April that the East-West pipeline has total pumping capacity of about seven million barrels a day. The system had previously lost roughly 700,000 barrels a day of capacity following attacks before being restored to full operation.
The energy shock is also moving through bond markets. The yield on the benchmark 10-year U.S. Treasury climbed close to 5% this week, while the 30-year yield reached its highest level since 2004, as higher oil prices and inflation concerns drove a broad global bond selloff.
On Thursday, the 10-year yield reached about 4.95%. Rising government-bond yields can filter through to borrowing costs for households and businesses, including mortgage, auto-loan and corporate financing rates.
U.S. stocks also declined Thursday. The S&P 500 fell 0.6% to 7,591.70, its fourth consecutive decline, while the Dow Jones Industrial Average lost 316.56 points, or 0.6%. The Nasdaq Composite dropped 0.7%.
Trump has continued to argue that the security objective outweighs the economic and political costs. He has also repeatedly predicted that the conflict will end around the Nov. 3 midterm elections, telling Fox News, "It ends right after the election."
The president has simultaneously acknowledged that the election is affecting decisions about how aggressively to prosecute the war. Asked by Ingraham about calls for the U.S. to attack Iran "in full," Trump replied, "Well, maybe I don't do that because of the election."
