One month into US-Israeli strikes on Iran, American households are confronting higher fuel and living costs as disruptions in the Middle East ripple through energy markets and supply chains.
Shipping through the Strait of Hormuz – the chokepoint for roughly one-fifth of global seaborne oil – nearly ground to a halt amid Iran's blockage of the narrow waterway. Although the strait isn't completely shut, traffic has been severely disrupted, contributing to volatility in crude markets.
Oil prices have fluctuated but remain sharply elevated compared with levels before the conflict began in late February. Brent crude has traded near or above $100 a barrel for most of the past two weeks, surging past $110 on Friday.
The rise has fed through to US retail fuel prices. The national average for regular gasoline stood at about $3.97 a gallon as of Friday, up roughly $1 from late February levels. Diesel prices have also climbed, adding costs for trucking and agriculture.
Those increases are beginning to transmit along supply chains. Trucking firms have introduced fuel surcharges, while higher petrochemical costs affect plastics, packaging and fertilizers. Food producers and retailers report upward pressure on wholesale prices for certain items, though the full pass-through to grocery shelves is still unfolding.
Consumer sentiment has weakened noticeably. The University of Michigan's preliminary index for March fell to 55.5 from 56.6 in February, marking the lowest reading of 2026 so far. Households cited concerns over rising gasoline prices and the broader economic impact of the Middle East conflict.
The energy shock is also complicating Federal Reserve policy. Chair Jerome Powell has said officials will monitor how long the disruption lasts and whether it feeds into broader inflation or spending. While the Fed has historically tended to "look through" temporary energy shocks, Powell noted that the duration and secondary effects remain uncertain, potentially delaying expected rate cuts.
A postponement of rate cuts would add fresh pressure on ordinary Americans already grappling with higher energy costs. With the 30-year fixed mortgage rate now around 6.4%, home purchases and refinancing remain expensive for many families stretched by rising gasoline and grocery bills. Auto loan and credit card rates, which have stayed elevated, continue to raise monthly borrowing costs for millions of households, further squeezing disposable income as real wage growth struggles to fully offset energy-driven price increases.
Politically, the prolonged nature of the US campaign is drawing scrutiny. Public polling has shown rising concern among Americans about deeper US entanglement in the region and the domestic economic toll.
A Reuters/Ipsos poll released earlier this week found that just 36% of Americans approve of US President Donald Trump's job performance, down from 40% a week earlier. Americans are increasingly associating economic strain with Trump, with only 25% approving of his handling of the cost of living and 29% backing his economic stewardship – his lowest ratings across both presidencies and lower than any economic approval recorded by Joe Biden, according to the poll.
The war's economic fallout is also emerging as a significant headwind for Republicans ahead of congressional midterm elections in November. With Republicans currently holding slim majorities in both chambers, rising gasoline and grocery prices are amplifying voter frustration over household costs at a time when the party in power traditionally faces midterm losses.
Anxious to contain the political toll, Trump has pushed for a swift end to the conflict. He insisted that Washington had held "very good" talks with Tehran, a claim Iranian officials have repeatedly denied, while also sending a ceasefire proposal that was rejected by Iran as one-sided. These contradictions have left the conflict's trajectory uncertain. Israel, which appears to favor a sustained military campaign, has further clouded prospects for a near-term resolution.
On February 28, the White House maintained that airstrikes were required to counter Iranian threats. Yet one month on, the strategic military campaign has translated into tangible monthly costs for many US families through elevated energy bills and caution in spending.
(Graphics by Zhao Hong)
