Midterm Elections and the Impact of Energy Prices on U.S. Politics

As both Democrats and Republicans assess the decisive results of the 2026 midterm elections, it is crucial to recall a prevalent political truth in the United States: “It’s the economy, stupid.” This phrase, coined by Democratic strategist James Carville for Bill Clinton’s 1992 presidential race, emphasizes the economy as a key electoral issue. However, energy prices often play a similarly significant role, especially when they escalate, intertwining energy and politics.

Midterm elections generally pose challenges for incumbent presidents, often resulting in shifts in the balance of power within Washington, D.C. Several factors influencing gasoline prices lie beyond the control of any president or Congress. The global market determines the prices of crude oil and petroleum products like gasoline, driven by economic forces of supply and demand. Even oil companies exert less control than perceived since over 60% of the world’s crude oil travels by ocean tankers, with 20% passing through the volatile Strait of Hormuz, largely closed in 2026 due to conflicts with Iran.

When energy prices increase, costs of other necessities, like food, also rise. Spikes in gasoline prices can lead to higher inflation regionally and nationally. Voters monitor these changes closely, and incumbents often risk losing reelection. During the 2026 midterms, gasoline prices reached unprecedented highs, placing Republicans in a difficult position as they defended their records in office.

The Historical Context

Throughout history, several presidents, including Gerald Ford, Jimmy Carter, Ronald Reagan, and Joe Biden, have confronted inflation and high fuel prices during midterms. Richard Nixon was the first modern president to face a significant energy crisis, which became political when Arab OPEC members imposed an oil embargo in response to U.S. support for Israel during the October 1973 Yom Kippur War. OPEC reduced oil output by 5% monthly, causing crude prices to spike by 184% from $4.31 to $10.31 per barrel by March 1974.

Nixon’s price controls did not prevent gasoline prices from rising 32%. After Nixon’s resignation in August 1974, Gerald Ford assumed the presidency amid 12.3% inflation and high gas prices. Ahead of that year’s midterms, Ford launched the “Whip Inflation Now” campaign, but his efforts failed. Republicans lost 48 House seats and five Senate seats. By the 1976 presidential election, gas prices averaged over 60 cents a gallon, equivalent to $3.49 when adjusted for late 2026 inflation, leading to Ford’s loss to Jimmy Carter.

Carter, Reagan, and Biden’s Energy Struggles

In Carter’s first two years, starting in 1977, U.S. unleaded gasoline prices remained high, with inflation hitting 9% in 1978. Consequently, Democrats lost 15 House seats and three Senate seats in the midterms. Inflation continued to rise, doubling gas prices by the 1980 presidential election. Burdened by economic woes and the Iranian hostage crisis, Carter was defeated by Ronald Reagan in 1980.

Reagan introduced “Reaganomics,” focusing on tax cuts, deregulation, reduced government spending, and relaxed petroleum price controls. By the mid-1980s, increased production from U.S. and non-OPEC nations created an oil surplus, reducing crude and gasoline prices. Nevertheless, Republicans lost 26 House seats in the 1982 midterms. While Reagan secured a landslide reelection in 1984, incumbents faced challenges in the 1986 midterms, losing five House seats and eight Senate seats despite plummeting oil and gas prices.

Donald Trump’s term saw crude prices rise by about 24% and gas prices by 22% by the 2018 midterms, where Republicans lost 41 House seats yet gained two in the Senate. Under Joe Biden, the COVID-19 pandemic stunted the U.S. economy, reducing crude production as gasoline demand fell 40%. Consequently, prices rose due to pandemic-related supply chain disruptions, with unleaded gasoline rising by 66% between November 2020 and February 2022.

Biden attempted to curb energy costs by releasing oil from the Strategic Petroleum Reserve in March 2022, which the Treasury Department assessed to have mitigated price increases. However, other Biden administration policies, such as halting the Keystone XL pipeline project and new oil and gas leases, exacerbated supply issues. By June 2022, U.S. inflation hit a 40-year high of 9.1%, and gasoline prices set records. The Democratic performance in the 2022 midterms reflected some respite, losing nine House seats and one Senate seat.

Trump’s Second Term Challenges

During Trump’s second term, crude oil prices declined by 4.5%, and U.S. oil production increased by 3.3%. Despite this, military actions against Iran interrupted Middle Eastern oil output, affecting tanker movements through the Strait of Hormuz. Though shipments recovered to 82%-92% of prewar levels by September’s end, gasoline prices spiked by nearly 40%, reaching $4.15 per gallon by early November 2026.

Polls indicated voters holding Trump responsible for elevated gasoline and grocery costs in addition to an unfavorable war. This serves as a crucial reminder of a core economic and political lesson: a flourishing economy generally favors incumbents and their parties, while economic pessimism often leads voters to oppose them.

Michael A. Mische, Associate Professor of the Practice of Management and Organization, Marshall School of Business, University of Southern California

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