One hundred days after the start of the American-Israeli war against Iran, the economic consequences in the United States are becoming increasingly tangible. Americans are directly facing a higher cost of living: prices for fuel, food and housing are steadily climbing. Polls show a significant portion of the population disapproves of how the White House is handling the conflict and considers military intervention a mistaken step. The war is turning into a growing political and economic burden for President Donald Trump’s administration.
Analytical firm Moody's Analytics estimated that the average additional expense for an American household because of the war is about $750. The lion's share of that amount — roughly $447 per household — fell on higher electricity and fuel costs. These figures clearly show how extra expenses cut into everyday budgets, forcing people to reassess their usual spending.
Mark Zandi, chief economist at Moody's, called the situation a “serious economic blow,” emphasizing that the main burden falls on middle- and low-income families. They spend the bulk of their income on basic needs, whose prices are rising the fastest. Michael Klein, a professor of international economics at Tufts University, notes that these groups devote the largest share of their income to food and housing, and those sectors have become noticeably more expensive. As a result, inequality is only growing, and the social consequences are widening.
Gasoline prices have become one of the most visible indicators of the crisis. According to the American Automobile Association, the average cost per gallon of fuel jumped from less than $3 at the end of February to more than $4.20 by early June. Experts link this surge to disruptions in energy markets, reciprocal strikes and tensions in the Strait of Hormuz — a key route for global oil and gas exports. The rise in energy prices immediately affected inflation: the personal consumption expenditures index recorded a significant increase in energy costs, and the overall inflation rate rose to 3.8%. Many Americans have already changed their lifestyles, for example switching to remote work to use their cars less frequently.
Consumer confidence has plunged: the University of Michigan index fell to one of its lowest levels in recent years. Studies show that nearly two-thirds of Americans have cut their spending due to high prices and economic concerns. The aviation sector, heavily dependent on fuel, also took a hit. Budget carrier Spirit Airlines ceased operations after more than three decades, partly citing rising fuel costs. Other airlines have raised ticket prices to offset expenses. At the same time, food prices began to rise, and experts fear further increases due to higher costs for fertilizers imported from the Gulf countries. Economist Jonathan Ernst warns that American farmers face a “double hit” — simultaneous increases in fuel and fertilizer prices.
The housing market has also felt the impact: long-term mortgage rates rose due to inflationary expectations — investors demand higher yields to compensate for the loss of purchasing power. This increases borrowing costs for both households and businesses. At the government level, the war continues to drain financial resources. According to a report, the Pentagon is spending about $2 billion per day on operations against Iran, and the administration is requesting additional billions to fund them. The budget proposal foresees a sharp increase in military spending alongside cuts to civilian programs. Thus, after one hundred days the war has become one of the key factors affecting the American economy, its political balance and financial stability.
Commentary on the news
What is the significance of the Strait of Hormuz for the global energy market and how is it connected to Iran’s economy? – The Strait of Hormuz is a strategic “oil valve” through which about 20–25% of the world’s oil trade and a significant share of liquefied natural gas (LNG) pass. For Iran it is not only a key route to export its own oil but also a leverage tool: control over the strait allows Tehran to exert pressure on world prices, which is critical for an Iranian economy heavily dependent on oil revenues.
What levers of influence does Iran have in the Strait of Hormuz and how can they affect global oil prices? – Iran has several tools: first, the Islamic Revolutionary Guard Corps (IRGC) can mine waters, use speedboats and deploy anti-ship missiles. Second, Iran can temporarily close the strait, creating market panic. The threat of even a partial blockade can raise oil prices by $10–20 per barrel, as happened in 2018–2019, because traders factor in the risk of supply disruptions.
Why do fertilizer prices from Gulf countries depend on the conflict with Iran, and how does this affect American farmers? – Gulf countries (Saudi Arabia, Qatar, UAE) are major fertilizer producers (especially urea and phosphates) due to cheap natural gas. The conflict with Iran increases shipping risks through the Strait of Hormuz — the main export route for these fertilizers. This leads to higher insurance premiums and logistical delays, raising global prices. American farmers importing fertilizers (for example, from Saudi Arabia) are forced to pay more, which reduces their profitability and can push up food prices in the U.S.
Full version: كيف وصلت فاتورة الحرب على إيران إلى جيوب الأمريكيين؟