Twenty days ago, filling your tank cost $2.98 a gallon. Today it costs $3.84. In California, it’s $5.29. Diesel — the fuel that moves every product you buy — crossed $4.86 last week and is still climbing. The cause is 6,000 miles away but the bill is arriving at every petrol station, supermarket checkout, and electric meter in the country.

The US-Israeli war on Iran, now entering its third week, has triggered the largest disruption to global energy supplies since the 1970s. The Strait of Hormuz — a 21-mile-wide passage through which one-fifth of the world’s oil flows daily — is effectively closed. Oil has hit $126 a barrel at its peak. And the economic shockwave is only beginning to reach American households.

This is the story of how a war the majority of Americans oppose is about to reshape the cost of living in ways that will be felt long after the last missile is fired.

On February 28, the United States and Israel launched a joint military operation against Iran. The strikes targeted Iran’s nuclear and missile infrastructure, military command centres, and — in the opening hours — the compound of Supreme Leader Ali Khamenei, who was killed in the attack. The stated goals were regime change and the elimination of Iran’s nuclear programme.

What followed was not the quick, contained operation the administration appeared to anticipate. Iran retaliated with waves of ballistic missiles and drones targeting Israel, US military bases across the Middle East, and — critically — energy infrastructure in Saudi Arabia, Qatar, Kuwait, the UAE, and Bahrain. By March 2, Iran’s Islamic Revolutionary Guard Corps declared the Strait of Hormuz closed. A commander warned that any vessel attempting to pass would be set “ablaze.”

That threat was not empty. At least five tankers have been damaged, two crew members killed, and roughly 150 ships sit stranded around the strait. Insurance companies have pulled war risk coverage, making transit economically unviable even where physically possible. The de facto closure is now in its third week.

The numbers are moving daily, but the trajectory is unmistakable. According to AAA, the national average for regular petrol reached $3.84 per gallon on March 18 — a 29% increase from $2.98 before the war began. California drivers are paying over $5.29. Diesel hit $4.86 a gallon as of March 9, triggering automatic fuel surcharges across the freight industry.

But petrol is just the most visible cost. The secondary effects are what economists are watching with alarm.

Produce, meat, and dairy are the most vulnerable because they can’t be stockpiled. Higher diesel prices feed directly into refrigerated transport costs. The American Farm Bureau Federation has formally warned the White House that farmers face disruptions in fertiliser supply — the Persian Gulf is a major source of natural gas-based fertilisers — and that the US “risks a shortfall in crops.” Their letter warned this “could contribute to inflationary pressures across the US economy.”

A 24.75% fuel surcharge kicked in for freight carriers for the week of March 10. That cost flows downstream to everything from furniture to electronics. The Middle East is also a major source of global helium — essential for semiconductor manufacturing — meaning disruptions could eventually push up the price of phones, laptops, and other consumer electronics.

European natural gas prices nearly doubled after Qatar was forced to halt all gas production following Iranian drone attacks on its facilities. The US is less directly exposed, but global LNG markets are interconnected. Heating and electricity costs are expected to rise, particularly in states that rely on gas-fired power generation.

Middle Eastern airspace closures have forced airlines to reroute flights, adding hours and fuel costs. Jet fuel prices have spiked. Several major regional airports that collectively handle around 15% of global air traffic are closed. Airlines have already begun raising ticket prices or cancelling routes.

Sources: AAA, EIA, Fortune, Time, Quinnipiac University, IEA, US Department of Energy

The cruelty of an oil shock is that it is regressive by design. Wealthy Americans — who are more likely to own electric vehicles, work from home, and absorb grocery inflation without changing their habits — will barely notice. As one Moody’s economist put it, higher-income households will “buoy consumer spending, blunting the impact of the war on economic growth.” The macroeconomic indicators may look manageable. The lived reality for the bottom half of the income distribution will not.

Lower- and middle-income workers who commute by car, who heat their homes with gas, who buy the cheapest groceries on the shelf — they face a compounding squeeze. Many are already stretched after years of post-pandemic inflation. A flatbed truck driver from Pennsylvania told the Associated Press he’s feeling the price surge on both his work and personal vehicles. A woman in Goleta, California, said prices “are already very expensive” and called the war “so unnecessary.” A barista in Chicago who drives 50 miles to an internship in Indiana said he’s had to make compromises just to afford the commute.

And then there’s the second-order effect economists are warning about: when household budgets tighten, consumer spending contracts. When spending contracts, businesses that are already absorbing tariff costs have nowhere left to cut — except payroll. As one Boston College economist told CNN, “There’s no free lunch. It’s going to show up somewhere.”

Here is the political problem the White House has not yet solved: just days before the war began, President Trump stood before Congress in his State of the Union address and pointed to falling petrol prices as one of his administration’s signature achievements. The national average had dropped to $2.92 a gallon, down from $3.11 at his inauguration. That progress has now been entirely erased — and then some.

Trump has described the oil price increase as “short term” and “a very small price to pay for USA, and World, Safety and Peace.” But polling suggests voters disagree. A Quinnipiac University survey released this week found that 53% of voters oppose the military action in Iran, including 60% of independents — the swing voters who will decide the 2026 midterms. A Pew Research Centre poll from early February, taken before the war, already showed 68% of Americans were concerned about gas prices.

The administration’s options for bringing prices down are limited. Trump temporarily suspended the Jones Act on March 19 to allow foreign-flagged vessels to carry domestic oil. He has ordered the release of 172 million barrels from the Strategic Petroleum Reserve as part of the IEA’s coordinated 400-million-barrel global release. He has offered government-backed political risk insurance for ships transiting the Gulf.

But none of these measures address the fundamental problem: the Strait of Hormuz remains closed. Until tanker traffic resumes — which requires either Iranian cooperation, a credible military escort (the Pentagon says it’s “not ready” for that), or a ceasefire — the supply shock will persist. J.P. Morgan’s chief global strategist has warned that even if production resumes quickly, elevated gas prices could persist through the autumn due to seasonal summer demand. That takes us directly into midterm election season.

Americans tend to view oil shocks in domestic terms: what’s it cost me at the pump? But the strategic consequences of this disruption extend far beyond US borders — and they circle back to American interests in ways that should concern every voter.

Around 80% of Asia’s oil imports pass through the Strait of Hormuz. Vietnam’s oil reserves are estimated to last less than 20 days. Pakistan and Indonesia have similarly thin buffers. Sri Lanka has reintroduced weekly fuel rationing and switched government workers to a four-day week. Schools across multiple Asian countries have been closed to save fuel.

And here’s the geopolitical kicker: Iran has reportedly been allowing Chinese-flagged vessels to transit the Strait while blocking everyone else. Tehran is also considering allowing cargoes traded in Chinese yuan to pass through. If that arrangement solidifies, it would represent a direct challenge to the US dollar’s dominance in global energy markets — an outcome the war was certainly not designed to produce.

China, meanwhile, had stockpiled 1.4 billion barrels of crude before the conflict and continues importing pipeline gas from Russia overland. The country that the US views as its primary strategic competitor is the one best positioned to weather this storm. The irony is not lost on analysts.

There are three scenarios, and only one of them avoids prolonged economic pain.

Scenario one: rapid de-escalation. A ceasefire is reached, the Strait reopens, and oil prices retreat toward pre-war levels within weeks. Gas prices stabilise by late April. Inflation is contained. This is the best case — and the one the administration is betting on. But Iran’s new Supreme Leader has pledged to maintain the Hormuz blockade, and the IRGC shows no signs of backing down.

Scenario two: a long grind. The war continues for weeks or months. Oil stays above $100. Gas prices climb past $4.50 nationally and past $6 in California. Inflation reignites. The Federal Reserve faces impossible choices — raise rates to fight inflation and risk recession, or hold steady and watch purchasing power erode. Consumer spending contracts. Businesses start cutting staff. The midterms become a referendum on the war.

Scenario three: escalation. The conflict widens. Iranian attacks damage Saudi or Emirati export infrastructure beyond repair. The IRGC makes good on its threat of $200 oil. Global recession follows. The economic damage dwarfs the 2022 energy shock. This remains low probability — but it was also low probability three weeks ago that the US would be at war with Iran at all.

Every modern American president has learned the same lesson: voters forgive foreign policy mistakes faster than they forgive expensive petrol. The 1973 oil crisis helped end Nixon. Carter’s handling of Iran and energy prices contributed to his defeat. Biden’s approval cratered alongside $5 gas after Russia invaded Ukraine.

The Trump administration launched this war with overwhelming military superiority and a stated belief that it would be quick. Twenty days in, Iran’s military is degraded but not defeated. Its new Supreme Leader is in place. Its missiles are still flying. And the Strait of Hormuz — the artery that connects a quarter of the world’s oil to the global economy — is shut.

The first week of this war cost US taxpayers an estimated $11 billion in military spending. But the bill that will actually decide the political future of this administration isn’t being tallied at the Pentagon. It’s being tallied at every petrol station, every supermarket, and every utility company in America.

The $126 barrel isn’t just a number on a commodities screen. It’s a forecast of your next grocery bill, your next energy bill, and possibly your next ballot.