Iran fortifies nuclear assets in underground bunker as conflict drives up U.S. gas prices

TAMPA, Fla. - U.S. airstrikes in Iran have temporarily paused, and President Donald Trump is holding off on a larger offensive for now. However, the conflict is rapidly evolving. 

What we know:

Based on recent intelligence first reported by The New York Times, Iran has moved its remaining nuclear assets to a deeply fortified underground bunker the U.S. military has dubbed "Pickaxe Mountain."

To protect the facility from U.S. Special Forces, intelligence assessments show Iran has deployed ground troops to the site.

The backstory:

President Trump previously stated that U.S. airstrikes last June successfully obliterated Iran's nuclear program. However, intelligence assessments suggest those strikes only set the program back by a few months. 

While Trump ordered a subsequent large-scale attack in February to finish the job, Iran retained both a supply of partially enriched uranium and the technical expertise to continue its development.

The leadership dynamic in Tehran has also shifted. Iran's former Supreme Leader Ali Khamenei—who historically held reservations about building a nuclear bomb—was killed in an airstrike. His son, Mojtaba Khamenei, was chosen to take over as the new Supreme Leader. 

As The New York Times first reported, U.S. intelligence assessments based on intercepted pre-war communications indicate the younger Khamenei has a stronger interest in pursuing nuclear weapons.

Those same intelligence assessments note the new Supreme Leader was also injured in an airstrike and is currently staying out of public view to protect himself from further attacks. While he remains in charge, intelligence indicates he does not wield the same level of absolute authority his father did.

Big picture view:

The geopolitical instability is sending shockwaves through the global economy. 

Although the U.S. receives comparatively little oil directly from the Middle East, crude oil prices are dictated by global supply and demand.

Iran has successfully disrupted the flow of oil through the Persian Gulf and the Strait of Hormuz, a critical chokepoint where 20% of the world's oil normally ships. 

Simultaneously, Iranian-backed Houthi rebels are threatening Saudi Arabian oil tankers in the Red Sea where another 6% of the global supply normally ships.

Why you should care:

The conflict is hitting American wallets directly at the pump and the grocery store. The national average for a gallon of gas has reached $4.11 this weekend, hovering near $4 in Florida, with prices expected to climb sharply from coast to coast.

The impact on diesel fuel is even more significant. Diesel is more complex to refine and carries a higher federal tax. Because most heavy-duty freight runs on diesel, commercial truckers are now paying between $1,200 and $1,300 just to fill a single 250-gallon tank. Those higher shipping costs are often passed down to consumers, driving up the price of retail goods across the board.

• $4.11: The national average price for a gallon of gas this weekend, according to AAA Auto Club.
• 20%: The portion of the global oil supply that typically travels through the Persian Gulf, which Iran is currently disrupting.
• $1,200: The approximate minimum cost for a commercial trucker to fill a heavy-duty freight tank at current diesel prices.

What they're saying:

President Donald Trump told Axios he is close to making a decision on a massive attack, noting regarding Pickaxe Mountain: "We'll be hitting that area very, probably pretty soon and there's not a thing they can do about it."

Mark Jenkins, AAA Auto Club said, "All of these things just create a lot of uncertainty and concern within the oil market. That’s causing oil prices to get more expensive."

Patrick De Haan, a GasBuddy Analyst said, "The next couple of weeks are likely to feature a sharp rise in gas prices virtually coast to coast."

Meanwhile, Kathy Bostjancic, Chief Economist at Nationwide, said: "It will take months for oil, gasoline, diesel and other commodity prices to get back to the pre-war levels just because there's a backlog of supplies."

What's next:

While President Trump has not committed to sending U.S. ground troops, he has strongly suggested that an attack on Pickaxe Mountain is coming.

Economically, the road to recovery will be long. Strikes and counterstrikes have physically damaged Middle Eastern oil production facilities and refineries. To compensate, nations worldwide have tapped into their emergency oil reserves. 

Even if the conflict resolves tomorrow, global governments will need to purchase massive amounts of fuel to replenish those reserves, meaning high gas prices and elevated inflation may persist for months.