Nick Friedman runs a moving company. He has 2,000 trucks, more than 200 franchise locations, and a business model that depends on diesel. Since the conflict in the Middle East began five weeks ago, fuel has climbed from 3 to 5 percent of his revenue to 6 to 10 percent. He has not yet raised prices. "We are in a bit of a Catch-22," Friedman, co-founder of College Hunks Hauling Junk and Moving in Tampa, told CNBC. "Our fear would be if we start raising prices it will hurt our customers." That dilemma, multiplied across hundreds of thousands of American businesses, defines what economists are now calling an informal war tax — a bill arriving in the form of higher gas prices, fuel surcharges, airline bag fees, and rising mortgage rates that no one voted on and no one can easily avoid.
The Numbers Landing on Kitchen Tables
The tally is not abstract. The American Enterprise Institute published a detailed analysis on April 3, 2026, tracking cumulative costs across gasoline, diesel, jet fuel, fertilizer, and equity losses since the start of the conflict. The summary is stark: Americans are collectively absorbing roughly $1.4 billion per day in war-related costs, based only on the categories the study examined. For the average U.S. household, that equates to approximately $410 per month, according to the AEI analysis.
Gasoline alone has cost American consumers a cumulative $6.7 billion through April 1, or roughly $50 per household since the conflict began, according to the AEI study. If prices stay where they are, that number reaches approximately $300 per household by June 30, and nearly $550 by September 30. Patrick De Haan, head of petroleum analysis at GasBuddy, warned that a $4 national average breaches what he called a "psychological wall" and flagged the potential for prices above $5 per gallon if conditions near the Strait of Hormuz do not improve. Brent crude was trading around $110 per barrel as of early April, and De Haan noted that pump prices typically lag oil prices by two to four weeks, meaning the full effect of current oil prices had not yet hit drivers.
The Center for Strategic and International Studies estimated that the war cost the U.S. Treasury $12.7 billion over the first 12 days of fighting, according to reporting cited by the AEI. Projecting that daily rate through April 1 produces an estimated total public cost of approximately $35 billion, or more than $210 per IRS tax return, or roughly $260 per household. Combined with private-sector fuel and fertilizer costs, AEI estimated the total public and private burden at about $410 per household per month.
How the Costs Are Cascading
The mechanism is energy. The closure of the Strait of Hormuz, through which roughly 20 percent of the world's oil supply normally flows, has tightened global supply in ways that drive up the cost of virtually everything that moves or is made with petroleum-derived inputs. The effects are showing up in places that might not immediately seem connected to a conflict thousands of miles away.
United Airlines and JetBlue both raised baggage fees this week, citing operating cost increases. Amazon announced a 3.5 percent fuel surcharge on third-party sellers using its logistics network. Amazon described the surcharge as "meaningfully lower" than levies applied by other major carriers in a statement to CNBC. JetBlue said it "regularly evaluates how to manage those costs while keeping base fares competitive and continuing to invest in the experience our customers value."
Washington Post reporting published April 4, 2026, described gas prices in Los Angeles exceeding $6 per gallon. Mortgage rates had risen to their highest level in seven months, the Post reported, as financial markets priced in both the inflationary pressure of higher energy costs and the uncertainty of an unresolved military conflict. Prices for soda bottles and detergents, both products with petroleum-linked supply chains, were also expected to rise in coming weeks, according to that reporting.
For businesses that cannot absorb the higher costs or pass them along, the squeeze is becoming existential. Friedman's franchise model puts individual franchise operators directly in the crosshairs. "Many franchisees are in precarious positions," he told CNBC. Unlike large corporations that can add disclosed surcharges, small operators in competitive markets face customers who will simply choose a cheaper alternative, whether that is another moving service or, in his words, a group of friends with pickup trucks.
The Policy Tools Are Limited
What makes this economic shock different from prior crises is the limited reach of the standard government response playbook. During the 2008 financial crisis and the 2020 pandemic, the federal government deployed stimulus spending, the Federal Reserve cut interest rates aggressively, and direct payments went to households. None of those tools fit neatly onto an inflationary supply shock driven by oil prices.
Daken Vanderburg, chief investment officer at MassMutual Wealth, described the dynamic to CNBC. "Policy is likely not riding to the rescue like it did during the Covid era," Vanderburg said. The Federal Reserve, he noted, faces its own bind. The central bank has not indicated any greater likelihood of cutting rates to stimulate the economy, given the risk of pushing inflation higher. The market had recently priced in an increased chance of a rate hike given surging oil prices, before Fed Chair Jerome Powell indicated this week that he saw no reason to raise rates. Powell noted that short-term oil shocks are typically a factor that central banks look past when analyzing inflation, and that longer-term inflation expectations remain well anchored.
Vanderburg framed higher energy prices as a consumption tax: they ripple across goods and services broadly, reducing the amount households have available to spend on everything else. "Discretionary spending is typically where the cycle starts. Consumers pull back from items which are discretionary first," he told CNBC. A short conflict allows households to dip into savings and weather the higher costs without fundamentally altering their behavior. A longer conflict shifts the calculus. "That slows growth and hits spending, and does it quite quickly," he said.
The Consumer Economy at Stake
The structural exposure is significant. Consumer spending accounts for close to two-thirds of U.S. economic activity. Where household dollars go largely determines where the broader economy goes. That dependence on consumption means an energy price shock, even one that is supply-driven rather than demand-driven, hits the United States with outsized force compared to more manufacturing-intensive economies.
Washington Post reporting noted that even if the conflict resolves in the next few weeks, some economic pain will linger for months. Supply chain disruptions, elevated insurance costs for shippers, and repriced financial contracts do not unwind the day a ceasefire is announced. Businesses that have already committed to higher fuel surcharges or renegotiated supplier contracts will not immediately roll those changes back. Consumers who have altered spending patterns in response to higher prices may not immediately restore their prior habits.
The AEI analysis modeled three scenarios through June 30: current prices held flat, current prices up 25 percent, and current prices down 25 percent. Under the high scenario, cumulative additional expenditure on fuels alone would reach approximately $103 billion through June 30, equivalent to roughly 0.3 percent of CBO's estimated 2026 U.S. GDP. If that rate of increasing cumulative costs continued through the remaining two quarters of the year, additional fuel expenditure would approach 1 percent of GDP, representing money diverted from broader economic activity into energy costs.
Where This Goes From Here
The trajectory depends heavily on two variables: the duration of disruptions near the Strait of Hormuz and the pace at which pump prices catch up to crude oil prices. De Haan's warning about a $4 national average as a psychological threshold is significant. Prior research on gasoline price psychology suggests consumer behavior shifts meaningfully above that level, with cutbacks in discretionary driving and accelerated pullbacks in unrelated spending categories.
The fertilizer channel adds another dimension. Higher fertilizer costs, driven by the same energy price surge, push up agricultural production costs. Those increases work their way through the food supply chain over the span of months, meaning grocery price increases may arrive later than fuel price increases but persist longer.
For Friedman and his franchisees, the immediate question is simpler and more urgent: how long can they absorb costs that have doubled without either raising prices or losing business? His answer captures the bind facing much of the American small business sector. "I don't know that we have that luxury," he told CNBC, referring to the option of raising prices. That uncertainty — not hyperinflation, not a financial system collapse, but the slow grinding arithmetic of higher costs and constrained pricing power — is the texture of the war tax as it lands on Main Street.
Every week the Strait of Hormuz remains contested, the bill grows. So far, American consumers and businesses are paying. The open question is how much more they can absorb before spending patterns break in ways that push the economy toward the recession economists are already warning about.