Iran war drives $100 billion in extra energy costs for U.S. consumers
· Axios
The war in Iran has now cost U.S. consumers $100 billion in higher energy prices, and the bill is rising another $1 million about every two minutes, per a real-time estimate from Brown University as of Monday morning.
Why it matters: Energy inflation shows up across the entire economy, and the recent surge in diesel prices in particular threatens to have a dramatic impact on freight and travel in the weeks and months to come.
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By the numbers: The Iran War Energy Cost Tracker from Brown's Watson School says higher gasoline and diesel prices have cost the average U.S. household more than $760 since the war began Feb. 28.
- Most of that is gas, though the diesel burden is rising faster of late.
- On Friday, diesel hit an all-time record high, and it's continued to rise every day since. As of Monday morning it's at $5.90 a gallon, per AAA, up about 60% from a year ago.
Between the lines: Texas has borne the biggest share, with consumers paying around $11 billion in extra gas and diesel costs since the war began in late February, per the tracker.
- California and Florida are next, at about $8 billion and $5 billion, respectively.
The big picture: President Trump insists Americans are willing to pay higher prices to keep Iran from having a nuclear weapon.
- Yet voters consistently say inflation is their most important issue, and on that subject they give the president substantial negative marks.
What we're watching: There's still a great deal of uncertainty over how much oil is getting out of the Middle East, which will impact fuel prices in the coming weeks and months.
- The war in Ukraine is also having a significant effect, as Ukrainian attacks on Russian energy infrastructure move global markets, particularly for diesel.
The bottom line: Consumers are in for a longer period of higher fuel prices than anyone expected when the war began.
- With less than two months until the midterm elections, it'll be hard to temper their anger.