November’s midterm was 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 that was 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.”

But Trump, the “America First” president who campaigned on ending the U.S.’s foreign entanglements, risks alienating his base with his Iran offensive. Democrats see the war as evidence of what they have been telling voters about Trump all along: he does not care affordability.

“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. This has been at the expense of the needs of everyday Americans. And I do think voters will hold them accountable in November.”

President Donald Trump said in a social media post on Friday that there would be no deal to end the U.S. war against Iran without an “UNCONDITIONAL SURRENDER” by Iran.

The Dow Jones Industrial Average dropped more than 900 points, or nearly 2%, after Trump’s demand, which he wrote on Truth Social. The S&P 500 and Nasdaq Composite fell 1.6% each, and oil futures prices rose.

Trump said that after a surrender and “the selection of a GREAT & ACCEPTABLE Leader(s), we, and many of our wonderful and very brave allies and partners, will work tirelessly to bring Iran back from the brink of destruction, making it economically bigger, better, and stronger than ever before.”

“IRAN WILL HAVE A GREAT FUTURE. “MAKE IRAN GREAT AGAIN (MIGA!)” Trump wrote.

Trump’s demand came as Iran has yet to pick a leader to replace Supreme Leader Ayatollah Ali Khamenei, who was killed last weekend in an airstrike at the beginning of the war by the U.S. and Israel.

White House Press Secretary Karoline Leavitt, when asked by reporters later about potential future leaders of Iran, said, “I know there are a number of people that our intelligence agencies, that the United States government are looking at, but I won’t get any further.”

Trump in June made an identical demand of “UNCONDITIONAL SURRENDER” by Iran in another social media post as he considered launching a military strike against that nation.

The futures price of the global benchmark Brent crude oil rose, breaking $90 per barrel, after Trump posted his latest demand for Iran to surrender without conditions.

Qatar’s energy minister, Saad al-Kaabi, warned Friday that rising oil prices due to the war against Iran “could bring down the economies of the world.”

Al-Kaabi told The Financial Times that crude oil prices could hit as high as $150 per barrel within weeks if tankers cannot pass through the Strait of Hormuz. The last time oil topped $100 a barrel was when Russia invaded Ukraine in 2022.

Oil prices rose on Friday morning as investors continued to assess the impact of the U.S.-Iran war on global energy markets.

By 6:58 a.m. ET, global benchmark Brent crude futures added 4.5% to trade at $89.23 a barrel, notching a fresh 52-week high and levels not seen in nearly two years. U.S. West Texas Intermediate crude futures were last seen 6.3% higher at $86.06, hitting their highest level since April 2024.

Prices dipped overnight as investors continued to assess the impact of the U.S.-Iran war on global energy supply.

Crude prices are on track for their biggest weekly gain since Russia’s full-scale invasion of Ukraine in early 2022.

The spike comes as the U.S.-Iran conflict spreads across the Middle East, disrupting energy production and bringing traffic in the Strait of Hormuz, a critical shipping route, to a near standstill.

On Friday morning, the Financial Times reported that Qatar’s energy minister said the war in the Middle East could see Gulf energy exporters stop shipments within days. Saad al-Kaabi told the FT that crude prices could reach $150 a barrel in the coming weeks if oil tankers were unable to pass through the Strait of Hormuz.

Prices briefly dipped overnight after the U.S. issued a 30-day waiver to India — the world’s third-largest oil importer — to resume purchases of Russian oil. Washington had earlier imposed 25% “penalty” tariffs on India for buying Russian crude, which were revoked last month. The retreat in prices also came after news agency Reuters, citing an unnamed White House official, reported that the U.S. Treasury is planning to announce measures to curb energy price spikes, including potential interventions in the oil futures market.

The average price for a gallon of regular gasoline jumped nearly 27 cents since in the week to Thursday to $3.25, according to data from U.S. travel organization AAA.

The conflict between Iran and the U.S. enters its seventh day on Friday. In a press conference on Thursday, U.S. Defense Secretary Pete Hegseth said the U.S. had “only just begun to fight.”

“Iran is hoping that we cannot sustain this, which is a really bad miscalculation,” he told reporters.

“There’s no shortage of American will here … If you think you’ve seen something, just wait. The amount of combat power that’s still flowing, that’s still coming, that we’ll be able to project over Iran is at multiples of what it currently is right now when you add up our capabilities and those of the Israeli Defense Forces.”

“Contrary to what consensus thinks, I think higher energy prices could actually be deflationary for the U.S.,” Atakan Bakiskan, chief U.S. economist at Berenberg, told CNBC’s “Squawk Box Europe” on Friday.

The conflict in the Middle East is rapidly expanding across the region as the U.S. and Israel-led war with Iran enters its sixth day.

Images published Thursday showed destruction across Tehran after nearly a week of strikes on Iran’s capital.

Iran has retaliated by launching a wave of missiles and drones at Israel, as well as targeting U.S. allies in the region.

Explosions have been reported in Qatar and Bahrain, while oil-rich Azerbaijan said it was attacked by two Iranian drones and Tehran claimed naval fighters had struck a U.S. tanker in the north of the Persian Gulf.

U.S. President Donald Trump has said the Iran war could last for four to five weeks but warned the campaign could also “go far longer than that.”

“Cuba’s next,” said Sen. Lindsey Graham, a Republican and ally of U.S. President Donald Trump, after the U.S. and Israel began strikes on Iran.

The U.S. has imposed an oil blockade on the communist-run island nation since January, shortly after its ally and a key provider of oil, Venezuelan President Nicolás Maduro, was seized in an extraordinary U.S military operation. It has caused a worsening economic crisis and left Cuba facing its biggest test since the collapse of the Soviet Union.

Now Iran, with which Cuba has a strategic partnership, is under sustained attack. “This communist dictatorship in Cuba, their days are numbered,” Graham told Fox News’s “Sunday Night in America.”

Before the Iran strikes, Trump said he wanted a “friendly takeover” of the island, without giving details. The comments, alongside the U.S. attacks on Iran and Venezuela, have done little to allay growing fears in Havana, experts told CNBC.

A “friendly takeover” could resemble Venezuela in the aftermath of Maduro’s removal, “where you still have an authoritarian regime in power but moving in the direction and at the speed that the US determines,” said Carlos Solar, senior research fellow, Latin American Security at RUSI, a London-based defense think tank.

Solar told CNBC by email that Cuba had lost support from Venezuela and Iran “at a moment of maximum pressure” from the Trump administration.

But he added: “What is unclear is how the US will make the Cuban regime break, forcing Havana to capitulate.”

“We are not seeing the kind of military buildup prelude to operation Absolute Resolve that eventually led to Maduro being captured in January. It could well be that the US approaches Cuba in a totally different way,” Solar said.

A spokesperson for the White House and Cuba’s embassy in London did not respond to a CNBC request for comment.

Cuba’s Foreign Affairs Ministry has called for an end to the Middle East conflict and said it “condemns in the strongest terms” the joint U.S. and Israel attack on Iran on Feb. 28.

Russia recently warned that the situation in Cuba appeared to be escalating after Cuban forces killed four people who were off its coast in a U.S.-registered speedboat.

Trump has also said Cuba’s government poses “an unusual and extraordinary threat” and pledged to impose tariffs on any country that supplies it with oil. The U.S. Treasury said late last month, however, that it would allow the resale of Venezuelan oil to Cuba’s private sector.

The move appeared to reflect a small step to alleviate the island’s acute fuel shortage, which has forced a wave of airlines cut flights to the country. Tourism has long been a significant source of revenue for Cuba’s cash-strapped government.

Par Kumaraswami, professor of Latin American Studies at the U.K.’s University of Nottingham, told CNBC the Trump administration’s strikes against Iran and recent comments about Cuba’s regime had increased the mood of uncertainty and anxiety in Havana.

“Cubans are increasingly concerned about how they will survive in the midst of such global chaos, and the recent violence against Iran will have done nothing to allay their fears,” Kumaraswami said by email.

“At the same time, there are indications that the US administration is negotiating with the Cuban government regarding changes to Cuba’s economy, and this is indeed mirrored by Cuban President Miguel Díaz-Canel’s current focus on economic improvement as the priority,” she added.

Kumaraswami said the “message from Cuba” had been “constant” since the communists came to power in 1959: “Survival will only be achieved through adaptation to the changing geopolitical context.”

Cuba has adopted measures to protect essential services and ration fuel supplies for key sectors. The United Nations has previously warned of a possible humanitarian “collapse” as the country’s oil supplies dwindle.

“Cuba just bought itself a window — but it’s a narrow one,” Robert Munks, head of Americas research at risk intelligence company Verisk Maplecroft, told CNBC by email.

“The operation against Iran removes Cuba – temporarily – from Washington’s sights, as the US administration will be preoccupied with the Gulf campaign in the coming weeks.”

But Munks said he expected Cuba to return to the headlines, adding that the Cuban diaspora in South Florida would apply pressure and Washington has shown it is prioritizing the Western Hemisphere in its remodeled national security strategy.

In the aftermath of the Israeli-U.S. strikes on Iran, American allies in the Persian Gulf are hearing a sound that Ukrainian soldiers have long come to dread: the foreboding hum of the Shahed-136 ‘kamikaze’ drone. 

Originating from Iran, the Shahed has already become a fixture of modern warfare, with Tehran’s strategic partner, Russia, utilizing the technology in its years-long invasion of Ukraine. 

Now, the drones — the most advanced of which is the long-ranged Shahed-136 — have become central to Iran’s retaliation strategy against the U.S. and its regional allies, with thousands unleashed so far. 

At first glance, the Shahed is unremarkable compared with cutting-edge weapon technologies, with one analyst referring to it as “the poor man’s cruise missile.” 

But while American allies have managed to intercept the vast majority of incoming drones with the help of U.S.-provided defense systems such as the ‘Patriot’ missiles, many Shaheds still managed to hit their targets. 

The United Arab Emirates Ministry of Defence said on Tuesday that out of 941 Iranian drones detected since the start of the Iran war, 65 fell within its territory, damaging ports, airports, hotels and data centers.

Analysts say the key to their effectiveness lies in the numbers. The drones are relatively cheap and easy to mass-produce, especially compared to the sophisticated systems used to defend against them. 

Those factors make the drone ideal for swarming and overburdening aerial defenses, with each drone intercepted also representing a more valuable defense asset expended. 

“The Shahed‑136, among other unmanned aerial systems, has allowed states like Russia and Iran a cheap way to impose disproportionate costs,” said Patrycja Bazylczyk, analyst with the Missile Defense Project at the Center for Strategic and International Studies in Washington DC.

“They force adversaries to waste expensive interceptors on low‑cost drones, project power, and create a steady psychological burden on civilian populations.” 

U.S. government reports describe the Shahed-136 as a one-way attack unmanned aerial vehicle produced by Iranian entities tied to the Islamic Revolutionary Guard Corps.

Compared with ballistic missiles, the drones fly low and slow, deliver a relatively modest payload, and are limited to mostly fixed targets, said Behnam Ben Taleblu, senior director of the Iran program at the Foundation for Defense of Democracies, told CNBC.

Public estimates suggest Shahed drones can cost between $20,000 and $50,000 apiece. Ballistic and cruise missiles, by contrast, can cost millions of dollars each.

In that sense, the Shahed and its equivalents “basically serve as ‘the poor man’s cruise missile’ offering a way to strike and harass adversaries “on the cheap,” said Taleblu.

For Iran, which faces both international sanctions and limitations on acquiring advanced weapons, that cost advantage is significant.

Meanwhile, air defense systems used by Gulf states and Israel can cost between $3 million and $12 million per interceptor, according to U.S. Department of Defense budget documents.

This cost discrepancy raises a serious issue for Iran’s enemies: Air defense systems have finite numbers of defense missiles, with each target intercepted representing a valuable asset expended.

Thus, in a war of attrition, the drones could be used by Tehran to wear down air defenses, opening them up to more damaging attacks, analysts say.

“The logic is to expend drones early while preserving ballistic missiles for the long haul,” said CSIS’s Bazylczyk.

She added that Iran’s ability to sustain mass‑drone use will depend on its stockpiles, how well it can protect or restore its supply chain, and whether the U.S. and Israel can meaningfully disrupt the flow of components or production sites. 

The U.S. has long sought to disrupt Iran’s production of the Shahed-136, and recently imposed new sanctions targeting suspected component suppliers across Turkey and the UAE.

However, Russia’s production of Shahed drones shows that such systems can be manufactured at scale during wartime and amid targeted sanctions. 

U.S. officials claim Iran had launched over 2,000 drones in the conflict as of Wednesday. However, the country is understood to have large stockpiles and may be capable of producing hundreds more each week, military experts reportedly told The National newspaper.

“Gulf countries are at risk of depleting their interceptors unless they are more prudent about when it fires those interceptors,” said Joze Pelayo, a Middle East security analyst with the think tank Atlantic Council.

“The depletion is not imminent, but it remains an urgent issue,” he said, noting. However, attacks on multiple fronts by Iranian allies such as Hezbollah and the Houthis could put stockpiles at risk of being depleted within days, he added.

Some analysts have suggested that Iran has drawn from Russia’s extensive battlefield experience with the drones, including modifications such as anti-jamming antennas, electronic warfare-resistant navigation, and new warheads.

Those warheads typically carry 30 kg to 50 kg of explosives and can pack a punch, particularly when used in large swarms, with advanced versions capable of a range of up to 1,200 miles.

Michael Connell, a Middle East specialist at the Center for Naval Analyses, said that the Shahed-136 has proven so effective that the U.S. has reverse-engineered it and deployed its own version on the battlefield against Iranian targets. 

In its Iran attacks over the weekend, the U.S. Central Command confirmed that it had used such low-cost one-way attack drones modeled after the Shahed for the first time in combat. 

With drones becoming a fixture of the modern battlefield, methods for dealing with them are also evolving.

According to Taleblu from the Foundation for Defense of Democracies, Ukraine has found some success in downing drones with fighter jet cannon fire, a more sustainable deterrent than missile interceptors.

Ukraine also recently pioneered the development of cheaper mass-produced interceptors, which Kyiv claims can stop the Shahed.

Gulf states are also expected to adopt more sustainable approaches. The Pentagon and at least one Gulf government are reportedly in talks to buy the cheaper Ukrainian-made interceptors.

Meanwhile, Qatar’s Ministry of Defense says it is also using its air force jets to intercept Iranian attacks, including Shahed drones, alongside ground-based air defenses.

Electronic warfare targeting the Shahed’s GPS, as well as short-range missiles and directed-energy systems such as Israel’s Iron Beam, are also significantly cheaper to operate than traditional interceptors.

Still, analysts say Gulf states currently lack fast, high-volume anti-drone capabilities. Developing and deploying such systems will likely take years, said Atlantic Council’s Pelayo.

“Countries in the Gulf hosting U.S. bases, such as Bahrain, Kuwait, and the UAE, benefit from an extended ability to repel drone attacks through the American-operated system, but it is still not enough against mass and sustained attacks.”

Spain has pushed back against the White House’s claim that it agreed to cooperate militarily with Washington amid the conflict with Iran, doubling down on its anti-war stance despite the U.S. president’s threat to sever trade ties.

White House spokesperson Karoline Leavitt said on Wednesday that Madrid’s position of refusing to allow the country’s military bases to be used in the ongoing Iran war had now changed.

“With respect to Spain, I think they heard the president’s message yesterday loud and clear, and it’s my understanding, over the past several hours, they’ve agreed to cooperate with the U.S. military,” Leavitt told reporters.

“The president expects all of our European allies, of course, to cooperate in this long sought-after mission, not just for the United States but also for Europe, to crush the rogue Iranian regime.”

Spain swiftly and “categorically” rejected Leavitt’s assertion, however.

“The Spanish government’s position on the war in the Middle East … and the use of our bases has not changed at all,” Foreign Minister Jose Manuel Albares told private radio station Cadena Ser, according to Reuters.

The chaotic messaging between two NATO allies comes shortly after U.S. President Donald Trump vowed to cut off all trade with Madrid, calling Spain “terrible” and repeating his criticism of Spain’s defense spending.

Spanish Prime Minister Pedro Sánchez responded on Wednesday by describing the sprawling Middle East crisis as a “disaster” and summarized his government’s position in just three words: “No to war.”

Sánchez has emerged as one of the European Union’s leading critics of U.S. and Israeli strikes against Iran, having also been an outspoken critic of Israel’s war in Gaza.

Arancha González, former foreign minister of Spain, told CNBC on Thursday that Trump’s attacks on Sánchez were not the first time the U.S. president has criticized a European leader.

British Prime Minister Keir Starmer, Ukrainian President Volodymyr Zelenskyy and Denmark’s Mette Frederiksen have all previously been singled out by Trump.

“What do they all have in common? They have said ‘no’ or they have questioned motives by the U.S. president,” González said. She added that political leaders who stood firm were more likely to be in a better position over the long term.

González, who now serves as the Dean of the Paris School of International Affairs (PSIA) at Sciences Po, also issued a warning to Washington over Trump’s threat to sever trade ties with Madrid.

“Let me say that it would be foolish of the U.S. to have a trade embargo on a country with which it has a trade surplus. The U.S. has a trade surplus with Spain. President Trump always complains about imbalanced trade relationships. Well, here is a great trade relationship where he is a winning,” González told CNBC’s “Squawk Box Europe” on Thursday.