There are flickering signs that the United States and Iran might negotiate a settlement to end the unprovoked war launched by President Trump earlier this year.
A settlement would be welcome news. But even if a deal happens tomorrow, here’s the reality: Americans will be paying high fuel prices for months to come. The economic damage from this conflict is already done.
Since the U.S. and Israel attacked Iran in late February, energy prices have devastated working families. Gas prices jumped from under $3 a gallon to $4.50 or more. In California, they soared past $6. Diesel fuel climbed just as much — up more than 50 percent.
The culprit is the Strait of Hormuz, a critical shipping channel through which much of the world’s oil travels. When that channel closes, oil can’t reach markets. Prices spike everywhere — not just at the pump, but in grocery stores, in delivery services, and in heating costs.
You might wonder: the United States has plenty of oil, so why does it matter if the Strait of Hormuz closes?
The answer is simple. Because the U.S. exports oil, global oil prices also affect what Americans pay at the pump — even for domestically produced fuel. When world oil supplies tighten, prices everywhere go up. Additionally, many U.S. refineries depend on imported crude oil to operate, so disruptions to global shipping directly affect what they can produce and what they charge.
My research team at Brown University tracks the real-time energy costs of this conflict. By now, we found that higher gasoline and diesel prices alone have cost American consumers almost $50 billion — far more than the military costs acknowledged by the Pentagon.
That damage is done. It won’t be reversed by a peace agreement.
The average American household has paid an extra $360 in fuel costs since the conflict began — and that number is still climbing. That’s more than a week’s worth of groceries for the average American family (groceries cost about $270 a week).
That’s money many working families simply don’t have to spare. Many families have had to cut back on driving. Some have canceled trips to see relatives. Others struggled with heating bills. That pain is real and it’s here now.
Even if a peace deal reopens the Strait of Hormuz soon, prices won’t drop immediately. Oil infrastructure in the Persian Gulf has been damaged — refineries and production facilities will take months or years to repair. Shipping insurance companies may remain wary of the route. Some tankers may face new tolls. These supply constraints will keep prices elevated long after diplomacy succeeds.
The reality is that the conflict has already imposed enormous costs on ordinary Americans — especially the poor. A peace agreement can prevent things from getting worse. It cannot undo the damage already done — or quickly restore cheap energy.
We need policymakers to understand this. A settlement should happen, and quickly. But Americans shouldn’t expect quick relief at the pump. The tab from this conflict will be paid by working families for months, regardless of what happens next.
President Trump’s foolish decision to start this conflict is the reason families are struggling to fill their tanks and afford groceries. That’s a fact voters this year are unlikely to forget.
