Iran uses oil prices as leverage in 'game of chess' with Trump ahead of US midterms

More than seven months into the U.S. conflict with Iran, higher fuel costs are driving up the price of driving and flying, straining American households as the midterm elections near. Motorists and airline travelers have felt the immediate impact as the fighting disrupts oil shipments in the Middle East. Some companies have raised delivery fees or product prices, but many have absorbed part of the added costs.

Moody’s Analytics economist Mark Zandi estimates the war has cost the average household nearly $2,000, including $1,100 in energy costs, $540 in higher interest rates, and $360 in military expenses. The war has cost consumers at least $50 per week in higher energy prices, according to Zandi. Here's a breakdown of price changes since the war started and potential future increases in costs: Gasoline prices have risen significantly, from an average of $2.98 per gallon in September to $4.33 a gallon now, a 45% increase over prewar levels.

Diesel prices have also climbed, from $3.76 to $6.33 per gallon, a 68% increase. While diesel is less visible to most Americans, it contributes to overall inflation by raising the cost of transporting goods. Fuel prices in the Strait of Hormuz remain uncertain due to ongoing conflict, leading to ongoing price volatility. Airlines have passed higher fuel costs onto consumers, with airfares up about 22% since September.

However, the main concern is the potential for further flight cuts if fuel prices remain volatile. Grocery prices have also been affected, though the extent is unclear. The USDA now expects a 2.4% increase in grocery prices this year, compared to its initial forecast of 1.7%.