Americans are footing a $100 billion energy bill from the Iran war
By Matt Egan, CNN
New York (CNN) — The Iran war has saddled Americans with a massive energy bill that continues to mount as the conflict drags on.
US consumers are paying an extra $100.9 billion on gasoline and diesel alone since the war started at the end of February, according to a cost tracker published by The Watson School of International and Public Affairs at Brown University.
That amounts to $770 per US household – a figure that will likely rise as fuel costs remain elevated.
“We’re looking at a fall that’s going to be the most expensive ever for gasoline, but really for diesel. And that’s going to fuel every aspect of inflation,” Tom Kloza, chief energy adviser at Gulf Oil, told CNN’s Omar Jimenez over the weekend.
The research measures the additional financial burden on consumers by comparing actual energy prices with a “no-war” counterfactual.
Even though energy prices have not spiked as high as many feared, the Brown University tracker demonstrates how this conflict is eroding Americans’ discretionary income.
Consumers are paying $55 billion more (an average of $422 per US household) on gasoline alone since the war started.
Gas prices climbed to a fresh three-month high above $4.15 a gallon on Tuesday, according to AAA. Monday was the most expensive Labor Day for gas prices on record.
That’s up from $3.20 at this point last year and $2.98 before the war started. Gas prices are still well shy of the post-war high of $4.56 in May and the record of $5.02 a gallon in 2022 after Russia invaded Ukraine.
Diesel shatters all-time records
Diesel, a crucial fuel that powers trucks, trains, tractors and boats, has never been more expensive than today.
The average price of a gallon of diesel is $5.90 a gallon, up from $3.76 a gallon when the war started. That easily surpasses the prior record set in 2022.
Americans are spending an extra $46 billion (an average of $348 per household) on diesel alone, according to Brown University.
Diesel has skyrocketed more than 60% so far this year, leaving it firmly on track for the biggest annual percentage increase since AAA started tracking it in 2000.
$100 oil in sight
Some analysts warn of even higher prices to come.
Goldman Sachs ramped up its December price forecast on Brent, the global benchmark, by $5, to $85 a barrel. The Wall Street bank expects Brent to average $80 for 2027, up from its prior forecast of $75.
Goldman Sachs expects Middle East oil production to only gradually recover by the second of of next year and warned Brent could top $120 if Gulf output remains well below pre-war levels.
Brent crude is now flirting with $100 a barrel, a psychologically important level it hasn’t settled above since July 23.
But the problem isn’t just that oil is expensive. It’s that there aren’t enough refineries operating to process that crude, turning it into the gasoline, jet fuel and diesel that power the world economy.
Three of the world’s four refining hubs – the Middle East, Russia and China – have been sidelined by war and export restrictions. US Gulf Coast refineries are running as fast as they can to offset those losses.
“This is a quiet but very, very concerning crisis right now,” Kloza said, adding that consumers across the country are “gonna pay a fortune.”
The August Consumer Price Index inflation report, scheduled for release on Friday, is projected to show prices climbed by 3.4% year over year. With inflation stuck well above the Federal Reserve’s 2% target, the US central bank is expected to seriously consider raising interest rates at its policy meeting next week.
Trump promises lower prices
Diesel is on the verge of crossing $6 a gallon nationally for the first time ever.
Patrick De Haan, head of petroleum analysis at GasBuddy, warned on X on Monday that diesel “could blow past” $8 a gallon in California.
According to AAA, diesel averaged a record $7.83 a gallon in California on Tuesday, up from $5.14 at this point last year.
“Some pumps aren’t even built to display what could come next,” De Haan said.
The record-high energy prices are a blow to President Donald Trump, who blasted Biden-era prices during the 2024 campaign and promised to make energy cheap again.
“Oil prices will drop precipitously…when we WIN the war with Iran,” Trump posted on Truth Social on Monday night, echoing comments he’s made for months as the war has dragged on.
The-CNN-Wire
™ & © 2026 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.
