Consumers in the United States are experiencing significant financial strain due to a surge in oil prices and Treasury yields, both of which have been exacerbated by the ongoing U.S. war with Iran [1]. According to Moody's Analytics, the average U.S. household has incurred an estimated $1,760 in additional costs since the conflict began, with $930 of that total attributed to higher energy prices, including gasoline, diesel, and jet fuel [1]. Cumulatively, U.S. consumers have spent over $121 billion extra on energy since the onset of the war [1].
The 10-year Treasury yield reached its highest level in 19 years this week, increasing borrowing costs for major purchases such as homes and cars and adding $425 to the average household's expenses since the conflict started [1]. An additional $405 per household is linked to higher military spending, which is expected to be covered through increased national debt or taxes [1].
U.S. crude oil prices closed above $105 per barrel on Tuesday, marking the highest level since mid-May, despite assurances from Energy Secretary Chris Wright that a Saudi pipeline closure would be brief [1]. The national average price for a gallon of gasoline rose to $4.32, up 6% month-over-month and 36% year-over-year, while diesel prices hit all-time highs above $6 per gallon, approximately 70% higher than a year ago [1]. These increases have led economists to warn that companies may pass on higher transportation costs to consumers, further fueling inflation [1].
Consumer sentiment has also been affected, with over 29% of respondents in the University of Michigan's September survey mentioning gas prices, a significant rise from 12% and 6% in the same month of 2024 and 2025, respectively [1]. Deloitte estimates that a 20% increase in crude oil prices could add about 0.3 percentage points to inflation, not accounting for secondary effects on airfare or food prices [1]. Airfare has been one of the fastest-rising categories in the Bureau of Labor Statistics' consumer price index [1].
CONCLUSION
The U.S.-Iran conflict has sharply increased energy and borrowing costs for American households, resulting in an estimated $1,760 in additional expenses per household. With oil and Treasury yields at multi-year highs, consumers face mounting financial pressure, and inflation risks remain elevated. Market sentiment is negative, and the economic impact is significant.