Iran War Adds $115 Billion to US Energy Costs, Moody's Zandi Says

September 14, 2026 at 07:30 AM2 min

This digest was compiled by AI from multiple sources — links to the originals are below.

The Iran war has added about $115 billion to U.S. energy costs, or roughly $860 per household, Moody's Analytics Chief Economist Mark Zandi said Thursday. He warned that gasoline could reach $4.50 a gallon as oil approaches $100 a barrel. The Federal Reserve is on the verge of raising interest rates as energy costs filter into inflation expectations.

Key Facts

Moody's Analytics Chief Economist Mark Zandi said the Iran war has added about $115 billion in U.S. energy costs, or roughly $860 per household.
The 10-year Treasury yield closed Thursday at 4.943%, its highest close since October 2023, up from below 4% before the war.
Zandi said the Federal Reserve is on the verge of raising interest rates, with consensus for a quarter-point hike in a couple of weeks.
Brent crude recently moved above $100 a barrel and U.S. gasoline prices climbed above $4 a gallon amid Middle East disruption.
The Energy Information Administration raised its 2026 Brent forecast to about $91 a barrel.

Household Energy Burden

Zandi said the conflict has added about $115 billion in energy costs, or roughly $860 per household. He said the burden is heavier for lower- and middle-income Americans, who have less stock-market wealth and more debt. "And the high energy costs, the fact that we're paying over $4 a gallon, you know, really matters to those folks," he said. With oil prices approaching $100 a barrel, Zandi said gasoline could reach $4.50 a gallon.

Interest Rate Pressure

The 10-year Treasury yield has risen from below 4% before the war to about 4.75%, increasing borrowing costs for households and small businesses. The yield subsequently climbed closer to 5%, closing Thursday at 4.943%, its highest close since October 2023. Zandi said the Federal Reserve is increasingly focused on inflation risks as energy costs filter into expectations and wages. "So they're on the verge of raising interest rates," Zandi said, adding that he could see the Fed's decision going either way. He said the consensus was for a quarter-point hike in a couple of weeks.

Oil Market Outlook

Brent crude recently moved above $100 a barrel amid continued disruption around the Middle East, while U.S. gasoline prices climbed above $4 a gallon. The Energy Information Administration has also raised its 2026 Brent forecast to about $91 a barrel. Zandi said alternative oil supplies and production could ease the pressure, but warned that adjustment "takes time" and could unfold over several years.