Mounting costs of Iran war strain U.S. finances

The ongoing U.S.-Israel war against Iran, now dragging into its second month as of April 2026, continues to exert mounting pressure on the U.S. economy through energy shocks and fiscal strains. Rising oil prices and supply disruptions have driven inflation upward.

In March 2026, U.S. inflation climbed to 3.3% year-on-year, the highest level in nearly two years, compared to 2.4% in February. Energy prices saw a sharp spike, with the index increasing 10.9% in March, marking the largest monthly gain since September 2005. Meanwhile, the fuel oil index surged by 30.7% over the month, its biggest rise since February 2000.