Retail price impacts from the Iran war are uneven but add up for US households before midterms

NEW YORK (AP) — More than seven months into the U.S. war with Iran, sharply higher fuel prices are making it more expensive to drive and fly and adding to the cost of some goods, prolonging the strain on American households as the midterm elections approach. Motorists and airline passengers have borne the clearest consequences as the fighting disrupts Middle East oil shipments.

Some companies have raised delivery charges or prices on selected products. Yet the higher cost of making and moving goods has not translated into across-the-board price increases at stores. Shoppers may not be spared indefinitely, though.

Many companies have absorbed at least part of their higher production and transportation costs. A September jump in wholesale prices suggests some businesses may eventually charge more if fuel prices stay elevated. The chief economist at Moody’s Analytics, Mark Zandi, estimated this week that the war has cost the average U.S.

household the equivalent of almost $2,000, including $1,100 in higher energy prices, $540 in higher interest rates and $360 in military costs. The energy portion is growing by $50 a week at current fuel prices, Zandi said. Here’s a look at price changes since the war began and which goods and services could be most susceptible to increases in the months ahead: Filling up fuel tanks is noticeably more expensive BEFORE THE WAR: Regular gasoline averaged $2.98 a gallon nationwide and diesel $3.76 almost eight months ago, according to AAA.

Gas peaked at $4.56 in May, below its 2022 record, while diesel reached a record $6.53 in September. WHAT’S REACHED CONSUMERS: On Friday, the national average stood at $4.33 a gallon for gasoline, or 45% above its prewar level, and was up 68% for diesel at $6.33, AAA reported. Gas typically costs less in the fall, and this is the first October a gallon of regular gas has cost more than $4 on average, it said.

Expensive diesel is less apparent to most U.S. residents but contributes to overall inflation by raising the cost of moving goods. WHAT COULD COME NEXT: Shipping through the Strait of Hormuz remains dangerous and constrained, prolonging uncertainty over oil supplies and fuel prices.