More than seven months after the start of the US war with Iran, rising fuel prices are increasingly affecting the costs of American households. So far, companies are absorbing some of the increased production and transportation costs, but there is a risk that a growing part of them will be transferred to consumers, an Associated Press analysis shows. AP News
Moody's Analytics chief economist Mark Zandi estimates that the war has already cost the average American household the equivalent of nearly $2,000. Of that, about $1,100 is due to higher energy prices, $540 to higher interest rates, and $360 to military spending. The energy component alone adds about $50 a week to the burden at current fuel prices.
The most visible effect is at the gas stations. Before the war, the average price of regular gasoline in the United States was $2.98 a gallon, and diesel - $3.76. As of Friday, gasoline averaged $4.33 a gallon - a 45% increase, while diesel had risen 68% to $6.33. In September, diesel even hit a record $6.53.
The high price of diesel has a much broader impact than the car's fuel bill. The fuel is key to freight transport, and its price increases increase costs along the entire supply chain - from farmers and warehouses to stores. The danger of a new price increase remains due to restrictions and risks to shipping through the Strait of Hormuz.
Americans are also paying significantly more for airfare. Before the war, jet fuel cost an average of $99 per barrel worldwide. In April, its price doubled to $209, and in September it reached nearly $195 again. Airfares in September were about 22% more expensive than a year earlier. The average price of domestic flights in the United States increased from $405 at the end of 2025 to $445 in the April-June period.
Food prices have not yet risen as much as economists had expected. The U.S. Department of Agriculture initially forecast a 1.7% increase in grocery store prices in 2026, but now expects a 2.4% increase. It is not possible to say how much of this is directly due to the war, as tariffs, weather conditions and labor costs also play a role.
The pressure on producers is much greater. Estimates for fertilizer costs for major crops have increased by between 9% and 13%, and those for fuels, lubricants and electricity by between 33% and 41%. Cornell University economics professor Chris Barrett believes that retailers are likely absorbing some of the increase so as not to alienate consumers after several years of high food inflation. Food prices in September were about 22% higher than five years earlier.
The effect also extends to seemingly less oil-related products such as shoes. Nearly 70% of the materials in a synthetic shoe are petrochemical-based. In September, shoes in the US were 3.4% more expensive on an annual basis, and men's shoes - 4.5%. Industry representatives warn that oil, tariffs and geopolitical uncertainty are likely to continue to raise prices in 2027.
The rise in prices is also serious in the transportation of goods. In September, the costs of transporting and storing goods sold to businesses as production resources were 10.2% higher than a year earlier. In road and water freight transport, the increase reached 19.3%.
So far, American consumers do not feel the full extent of these increases, because many companies prefer to reduce their own margins instead of immediately raising final prices. However, the jump in producer prices in September is a signal that this buffer may be exhausted. If fuel prices remain high, a larger portion of the cost will likely be passed on to store prices.