3rd September 2026
For people in Caithness and across Highland, the war between the United States and Iran may seem a very long way away.
But listen to the conversations taking place in shops, garages, homes and workplaces and it is clear that the distance is becoming rather less important.
Oil Price at12.30pm Today $96.86
Before the conflict: The international benchmark sat steady near $72.48.
People are watching the price of petrol and diesel. They are thinking about the cost of heating their homes. They are noticing food prices. Businesses are looking at transport costs and wondering how much more they will have to charge. Anyone who uses heating oil does not need an economist to explain what an international energy crisis means.
The uncomfortable truth is that the Iran war has become part of Britain's cost-of-living problem.
And that raises an even bigger question on the other side of the Atlantic.
If Donald Trump cannot claim a clear victory, can he afford politically to end the war?
That may be one of the most important questions now facing the American president.
The war that was supposed to produce a result
Trump came into the conflict with enormous confidence in American military power. The implication was that overwhelming force would bring Iran to heel.
But wars do not always work that way.
Six months into the conflict, the United States and Iran remain locked in what has increasingly become a strategic stalemate. Iran has suffered enormous damage but has not simply surrendered. The United States has demonstrated that it can strike deep into Iran, but destroying military targets is not the same thing as achieving the political outcome Washington wants.
That leaves Trump facing a problem that presidents throughout history have encountered.
How do you end a war when you have promised victory?
If he stops fighting without obtaining something that can convincingly be presented as a victory, his political opponents will say that America spent enormous sums, lost lives and damaged its own economy without achieving its objectives.
If he carries on, however, the economic and political costs continue to mount.
And if he escalates dramatically, he risks making both problems considerably worse.
The petrol pump has become a political weapon
The most obvious warning sign is appearing at petrol stations.
Oil prices have been rising again as fighting continues and the Strait of Hormuz remains severely disrupted. Brent crude was around $97 a barrel on Thursday, with the market recording its fourth consecutive day of gains.
That matters because oil is not simply the price of petrol.
It is built into the cost of moving almost everything.
Diesel powers lorries, tractors, construction equipment, fishing vessels and much of the machinery that keeps the economy moving. When diesel becomes more expensive, the effect eventually appears in the price of food, building materials, deliveries and services.
That is why the latest figures should concern rural Scotland particularly.
Scotland's own economic bulletin reported that annual petrol inflation was still running at 17.7% in June, while diesel inflation was 27.4%. It also warned that road fuel prices had risen again during July.
These are not abstract numbers for somebody living in Caithness.
A few pence more on a litre matters when journeys are longer, public transport is limited and there is often no practical alternative to using a car or van.
Heating is another part of the story
For households that depend on heating oil, the problem can be even more direct.
The Scottish Government has already recorded the enormous increase in the cost of household liquid fuels during this period. Its June economic bulletin reported that liquid-fuel prices were still dramatically higher than a year earlier, even after some moderation.
And the latest figures from the Consumer Council's heating-oil price checker show just how quickly prices can move. On 2 September, its surveyed average for 900 litres was £850.84, compared with £790.93 less than a week earlier.
For someone in a rural community, that is not simply another statistic.
It is a household bill.
It is money that cannot be spent in the local shop, on a meal out, on a new appliance or on something for the family.
And that is how an international conflict gradually becomes a local economic problem.
Then there is food
This is where the real danger lies.
Energy prices do not remain confined to the energy sector.
The farmer pays more for fuel. The haulier pays more to transport goods. The processor pays more for energy. The supermarket pays more to move products around the country. Businesses face higher costs and eventually some of those costs have to be passed on.
It does not necessarily happen overnight.
That is one reason the full effect of an energy shock can take time to appear in inflation figures.
But it does appear.
The Scottish Government has already warned that higher energy costs have the potential to feed through into wider prices, both directly and indirectly.
So when people in Caithness say that the cost of living still feels high, despite politicians talking about inflation coming down, they are not necessarily confusing the two things.
Inflation falling does not mean prices have fallen.
It means they are rising more slowly.
The price level created by previous years of inflation remains.
Add another energy shock on top and household budgets come under renewed pressure.
And Trump has begun to feel the political consequences
This is where the American side of the story becomes particularly interesting.
Reuters reported this week that senior Trump advisers are worried about the political consequences of the continuing conflict ahead of the November midterm elections. The administration is trying to keep the conflict from escalating further, while continuing economic pressure on Iran.
That tells us something important.
The White House understands that Americans do not experience foreign policy through military briefings.
They experience it through their household finances.
They see the price on the petrol station sign.
They see their grocery bill.
They receive their electricity and heating bills.
And they notice when the cost of almost everything transported by road starts increasing.
A CBS poll earlier in the conflict found that Americans wanted the war to end, particularly those hardest hit by higher petrol prices.
That should worry Trump.
The temptation to hit harder
And here is the dangerous part.
When a president is struggling to demonstrate that a war is achieving its objectives, there can be an enormous temptation to believe that one more major operation will change everything.
Hit another target.
Destroy another military facility.
Increase the economic pressure.
Demonstrate American strength.
Then declare victory.
But what happens if Iran responds?
Oil could rise again.
Shipping could become even more difficult.
The Strait of Hormuz could become even more dangerous.
The consequences would not remain in the Middle East.
They would reach Britain, Europe and eventually Caithness.
And the higher oil goes, the greater the pressure on petrol, diesel, heating oil, transport and food.
It creates a vicious circle.
Trump wants a victory so that he can end the war. But the longer he fights in search of that victory, the greater the economic price becomes.
The $100 oil question
We should therefore watch the oil price almost as closely as the military headlines.
If Brent goes comfortably above $100 a barrel and remains there, the consequences become increasingly difficult to dismiss.
If it moves towards $110 or $120, the political calculations change again.
America has strategic oil reserves and is a major oil producer itself, so it is not simply dependent on Middle Eastern oil.
But oil is a global commodity.
America does not have to import every barrel for American consumers to feel the consequences of a global price increase.
Neither does Britain.
That is why something happening around the Strait of Hormuz can eventually affect the price of a tank of diesel in Wick.
There is no easy way out
Trump therefore faces an unenviable choice.
If he continues the war without a decisive result, the conflict risks becoming an expensive drain on American resources while further damaging his political standing.
If he escalates, he could potentially obtain the dramatic breakthrough he needs.
But he could just as easily produce another round of retaliation, push oil prices higher and make the cost-of-living problem even worse.
And if he ends the war without something that looks like a victory, his political opponents will accuse him of having started a war that America could not finish.
That is the trap.
He may discover that winning the war is difficult, but explaining why he ended it without winning may be even more difficult.
And Caithness should be watching
For people in Caithness and across Highland, there is a reason to pay attention.
We have seen before how quickly an international crisis can become a local economic problem.
The war in Ukraine demonstrated that very clearly. Energy prices rose, heating became more expensive, food prices increased and businesses faced higher costs.
The Iran conflict has the potential to repeat that process through a different route.
And rural communities can be particularly exposed because distances are greater, alternatives are fewer and energy costs can make up a larger part of household and business expenditure.
Highland Council itself has acknowledged the continuing pressure on household finances, specifically identifying home energy, food and fuel as essential costs placing pressure on residents.
So while Washington debates military strategy and Tehran calculates its response, there is another battle taking place much closer to home.
It is the battle taking place around the household budget.
The question for Trump is whether he can find a way out of Iran that allows him to claim victory.
The question for Americans is how much the war is going to cost them before he does.
And for people in Caithness and Highland, there is an even simpler question.
How much more will it cost us if he cannot?