Iran war hits Americans at gas pumps as conflict drives up energy costs

Nearly six months into the US war with Iran, its most visible impact for ordinary Americans is increasingly being felt far from the battlefield -- at gas stations, airports and in household budgets.

The national average retail price for regular gasoline stood at $4.006 per gallon as of Aug. 10, according to the US Energy Information Administration (EIA), keeping fuel around the politically sensitive $4 threshold.

The increase is particularly striking compared with expectations before the conflict. In January, the EIA forecast that US gasoline prices would fall 6% in 2026. Its latest outlook instead projects an average price of $3.78 per gallon for the year, compared with $3.10 in 2025.

Government inflation data also reflects the scale of the energy shock. Although gasoline prices eased in July, they remained 24.6% higher than a year earlier, while overall energy prices were up 14.7%, according to the Bureau of Labor Statistics (BLS).

Annual consumer inflation stood at 3.4% in July, compared with 2.4% in January, before the war began.

The impact varies considerably across the country. In the Washington metropolitan area, gasoline was 24.8% more expensive than a year earlier, while Dallas-Fort Worth recorded an increase of 19.8%.