How Iran's power struggle could end Trump's war and move markets
Six months into Donald Trump's war on Iran, a bitter power struggle in Tehran could decide when the conflict ends—and how markets, fuel bills, and everyday life respond on both sides of the Strait of Hormuz. Pragmatists want a deal to ease a battered economy; hardliners bet on endurance. With Supreme Leader Mojtaba Khamenei in hiding, the deadlock prolongs oil disruption, soaring inflation in Iran, and uneven global winners and losers.
Key Takeaways
- Iran's government is split between dealmakers who want to end the war and hardliners who believe not losing equals winning.
- For most of Iran's 90 million people, inflation above 89% and a collapsing rial have turned daily life into survival planning.
- Global investors who stayed calm have seen major stock gains since March, while consumers face higher fuel, food, and airfare.
- Strait of Hormuz disruptions keep Brent crude roughly 20% above pre-war levels, feeding costs from farms to airline tickets.
- How long the war lasts may hinge on which faction shapes policy—and whether Trump's diplomacy signals deal or escalation.
Why is Iran divided over ending the war with Trump?
Six months after US and Israeli strikes killed then-Supreme Leader Ayatollah Ali Khamenei on February 28, Iran's establishment remains intact but deeply fractured. President Masoud Pezeshkian, Parliament Speaker Mohammad Bagher Ghalibaf, and Foreign Minister Abbas Araghchi back a conclusive agreement, pointing to a war-battered economy, a US naval blockade, and damaged infrastructure.
"The war must end at some point," Pezeshkian said this month. "It would be better to end it today, while we are in a position of strength and dignity, and the entire world acknowledges our victory." They argue ending the 47-year conflict with Washington is the surest way to ease domestic crises and break global isolation.
Hardline conservatives see things differently. They distrust Washington, cite Trump's abandonment of the 2015 nuclear deal, and accuse moderates of exaggerating economic pain to push a humiliating peace. Lawmaker Kamran Ghazanfari told parliament that deal advocates "reek of nothing but capitulation and surrender."
Sanam Vakil of Chatham House told CNN that hardliners think they can wear Trump down by extending economic pain. Supreme Leader Mojtaba Khamenei has stayed largely silent, wary that backing either camp with an unreliable US president could damage his legitimacy.
How has life changed for Iranians six months into the war?
For most of Iran's roughly 90 million people, quality of life has deteriorated sharply. The Statistical Center of Iran reported inflation 89% higher year-on-year in the month ending August 22, with food prices up more than 127%. The rial hit a record low of 2.06 million to the dollar on Saturday.
Bijan, a 33-year-old data analyst in Tehran, told Al Jazeera his salary was worth more than $1,000 a month three years ago; after three raises it is now under $500. Marjan, a young Tehran resident, said she wants "a life that does not involve constantly clashing with others" but feels trapped in an exhausting loop of survival.
War damage to oil, gas, petrochemical, steel, and utility plants has worsened fuel and electricity shortages. Authorities are preparing for winter gas shortfalls, have cut vehicle fuel quotas, and plan petrol price hikes within weeks. More than 3,500 people have been killed, and large parts of civilian infrastructure lie in ruins.
Meanwhile, the judiciary continues weekly executions, intelligence agencies blacklist contacts, and authorities shut cafes and vendors over alleged noncompliance with Islamic norms. Sasan, another Tehran resident, said outside pressure often triggers a tighter domestic grip—a pattern many Iranians recognize from experience.
Who wins and loses in the global economy six months in?
The war's opening days triggered fears of surging oil, worldwide recession, and economic catastrophe. Six months on, the direst predictions have not materialized—but the toll is uneven. Michael Ashley Schulman of Cerity Partners told the Associated Press the global economy has pulled off the financial equivalent of a "Mission Impossible" scene.
Investors who did not panic have prospered. After five consecutive losing weeks and corrections in the Dow and Nasdaq, markets rebounded from a late-March bottom. The Dow gained nearly 19%, the S&P 500 rose almost 22%, and the Nasdaq surged 27%. The IMF said in July that war strains growth while AI enthusiasm offsets the drag.
Consumers and travelers are paying the price. Brent crude climbed from about $72 a barrel pre-war to nearly $120 at its peak and remains roughly 20% higher. Jet fuel is expected to cost 70% more than in 2025, pushing airlines to raise fares, add surcharges, and cut routes—Lufthansa Group alone slashed 20,000 short-haul flights.
Farmers face fertilizer prices that peaked 44% above pre-war levels in April, potentially borrowing against next year's soil health. The UN World Food Programme warns tens of millions could be pushed into hunger. For anyone tracking wealth hacks and passive income strategies, the split between buoyant equity markets and rising living costs is the defining pattern of this conflict.
What happens to oil, stocks, and travel if talks fail?
Iran says it reached an understanding with Oman to open a Hormuz transit route, but the Trump administration reportedly opposes the deal and wants full, unrestricted reopening. Mediators continue trying to revive US-Iran talks, yet no breakthrough is in sight while Washington imposes its toughest-ever sanctions on Tehran.
Trump's mixed signals complicate Tehran's internal debate. Vakil noted he says he wants to "make Iran great again" then threatens Iran in the next message, fanning paranoia among conservatives who believe diplomacy precedes another military campaign. JD Vance has said a top US priority is bringing gasoline prices down—not Iran's nuclear program.
If hardliners prevail, the war may continue in a grinding "war between the wars" posture, keeping Hormuz traffic thin and energy costs elevated. Clean-power investment has already accelerated—26 countries announced electrification measures in response, and global EV sales are projected at 29% of vehicle sales in 2026.
For investors, the lesson is familiar: geopolitical shocks create volatility, but panic selling often misses the rebound. For households, prolonged closure of one of the world's most vital oil chokepoints means higher bills regardless of Wall Street's mood. Until Iran's factions agree on what victory looks like—and Trump commits to a durable deal—the economic aftershocks will keep landing unevenly.