In talking to people about the war in Iran over the past two weeks, I've noticed most people are treating this like a tragic but distant issue. In reality, this war is about to hit closer to the US than most expect.

I want to be clear: all loss of human life is a tragedy. The human cost of this war is enormous, and the economic impact is secondary to that. Talking about what this means for American households does not minimize what's happening on the ground in the middle east. However, understanding the economic ripple effects of war is important, especially for families already struggling with rising costs.

This week, oil just crossed $100 a barrel for the first time since 2022 and Iran's Revolutionary Guard has warned that oil could hit $200 a barrel if the conflict continues. Already, gas prices have surged almost 60 cents in a single week meaning the national average just hit $3.58 per gallon, up from $2.98 before the war started. To put that in real terms: filling up a Toyota Camry today costs about $57, up from $47 two weeks ago. If oil hits $200 a barrel, gas could climb past $7 a gallon and that same fill-up would run you over $110.

Higher cost of oil means a higher cost of goods and, yes, electricity prices because natural gas, (the fuel that generates most of America's electricity) is caught up in the same supply disruption.

The Supply Chain, in Plain English

The Strait of Hormuz is a narrow waterway between Iran and the Arabian Peninsula that about 20% of the world's oil supply passes through every day. Since the U.S. and Israel launched strikes on Iran on February 28, shipping through the strait has effectively stopped. Iran has threatened to attack any tanker that tries to pass. That disruption has caused oil prices to surge roughly 50% in under two weeks.

Natural gas is also being hit. Qatar, which produces 20% of the world's liquefied natural gas (LNG), declared force majeure after Iranian attacks damaged its facilities, meaning global LNG supply has tightened overnight. Since spot prices are global, natural gas prices here in the US have started climbing too.

Natural gas is the single largest source of electricity generation in America and is the primary fuel for power plants in 25 states. When natural gas gets more expensive, utilities pass those costs to their rate payers.

The Energy Information Administration has confirmed that natural gas prices are the biggest short-term driver of wholesale electricity prices. In most regional power markets, the price of natural gas literally sets the price of electricity during most hours of the day. So when a conflict halfway around the world disrupts natural gas supply chains, it has a direct line to your bill.

Who Gets Hit Hardest

Not every part of the country is equally exposed. The impact on your bill depends on how much your state relies on natural gas for electricity, whether you're in a regulated or deregulated market, and how your utility buys its power.

New England (MA, CT, RI, ME, NH, VT)

Exposure: Extreme

New England is the most vulnerable region in the country. Despite being close to massive gas fields in Pennsylvania, the region doesn't have enough pipeline capacity to bring in domestic natural gas during winter. Instead, it relies on imported LNG delivered by ship which is the exact same global supply that Europe and Asia are now scrambling to secure.

Realistic impact: If the conflict lasts a few weeks, expect wholesale price spikes that utilities pass through over the next 1-2 billing cycles. Households could see an additional $20-50 per month on top of already elevated bills. If it lasts months, sustained increases of 10-15% or more are plausible.

What's temporary vs. permanent: The acute price spikes would ease once the Strait reopens. However, New England's pipeline constraints are a structural problem that existed before this war and will exist after it. Every global disruption hits this region harder than anywhere else, and that vulnerability isn't going away.

Texas (ERCOT)

Exposure: High

Texas generates most of its electricity from natural gas and runs a deregulated market where wholesale price swings reach consumers much faster than in regulated states. The EIA was already projecting a 45% increase in wholesale prices in this region for 2026 even before the conflict started.

Texans on variable-rate electricity plans are the most immediately exposed. When wholesale prices spike, those bills can swing dramatically from one billing cycle to the next.

Realistic impact: Customers on variable-rate plans could see bills jump $30-80 per month during periods of peak wholesale pricing. Customers on fixed-rate plans have a buffer for now but when those contracts come up for renewal, new rates will reflect the higher cost environment. Broader residential rate increases of 5-10% are realistic if price spikes remain throughout the summer.

What's temporary vs. permanent: The conflict-driven price spike is temporary, but Texas faces a separate structural challenge: surging demand from data centers and population growth is straining the grid. Even after oil prices normalize, the underlying supply-demand imbalance keeps upward pressure on rates. The war accelerates a trend that was already in motion.

Florida and the Southeast

Exposure: Moderate to High

Florida is the second-largest electricity-generating state in the country and is heavily dependent on natural gas. Regulated markets in the Southeast mean that price increases reach consumers more slowly, but most utilities in the region have fuel cost adjustment mechanisms that let them raise rates without government approval.

Realistic impact: Fuel cost adjustments of 3-8% over the next 2-4 months are plausible. For a household paying $150-200 per month, that's roughly $5-15 per month.

What's temporary vs. permanent: Mostly temporary. The regulated market structure provides a buffer, and the Southeast doesn't face the same structural constraints as New England. Once natural gas prices normalize, fuel surcharges should roll back.

California

Exposure: Moderate

California has a more diversified generation mix than most states, with significant solar, hydro, and wind generation alongside natural gas. While that diversity provides some insulation, natural gas still plays a major role and the state already saw the steepest rate increase in the country last year at +8.9%.

Realistic impact: An incremental 2-5% increase on top of already rising rates. California rates are so high that even a modest percentage increase translates to real dollars. For a household using 500 kWh per month, a 5% bump adds roughly $8-10 per month.

What's temporary vs. permanent: The conflict-related component is temporary. But California's rate trajectory was already steep due to wildfire mitigation costs, grid upgrades, and renewable transition investments.

Pacific Northwest (WA, OR)

Exposure: Low

Hydroelectric power dominates electricity generation in Washington and Oregon, with natural gas playing a secondary role. This makes the Pacific Northwest the most insulated region from natural gas price spikes. Households here are more likely to feel the conflict at the gas pump than on their utility bill.

States with Heavy Nuclear or Wind Generation (IL, SC, IA, KS, SD)

Exposure: Low to Moderate

States where nuclear or wind is the primary generation source have a natural hedge against fossil fuel price spikes. These states may see wholesale price increases of 1-3%, but the bill impact for most households would be small.

When Will This Hit My Bill?

Right Now (Weeks 1-2)

Wholesale electricity markets are already reacting. If you're in a deregulated market on a variable-rate plan (parts of Texas, Pennsylvania, Ohio, Illinois, New England), you could see changes within your next billing cycle. Gas prices at the pump have already jumped over 40 cents in a week. Electricity follows the same fuel, just on a slower timeline.

Next 1-3 Months

Utilities with fuel cost adjustment clauses (common in regulated states like Florida, Georgia, and the Carolinas) can raise rates to reflect higher fuel costs without going through legislative approval. These adjustments typically show up within 30-90 days.

Deregulated markets will feel it faster. If you're coming up for a contract renewal in Texas or the Northeast, new fixed-rate offers will reflect the higher cost environment.

3-6 Months Out

If the Strait of Hormuz reopens and production resumes, the acute oil price spike fades. The EIA projects oil will fall back below $80 per barrel by the third quarter of 2026, and closer to $70 by year-end.

However, damaged energy infrastructure across the Gulf region could take weeks or months to bring back online, even after a ceasefire. Energy analysts have warned that prices will maintain a risk premium until shipping through the Strait fully normalizes. And any formal rate increases filed by utilities during the crisis may stick around longer than the underlying cost spike, because regulatory proceedings move slowly.

How Bad Can It Get?

Best case (conflict ends in weeks, Strait reopens): A temporary spike that adds $10-30 per month for most households, concentrated over 2-3 billing cycles, then fades.

Middle case (disruption lasts 1-3 months): Sustained increases of $20-50 per month for households in gas-dependent regions. Fuel surcharges and contract renewals lock in higher rates for the near term.

Worst case (prolonged disruption, infrastructure damage): Energy analysts have warned oil could hit $135-150 per barrel. At those levels, electricity rate increases of 10-20% become realistic in the hardest-hit regions, with some effects lasting 6-12 months after the conflict ends.

What You Can Actually Do

I know all of this can feel incredibly overwhelming, especially when the majority of Americans are struggling to make ends meet. Geopolitical crises and the technical complexities of energy are all layered on top of each other, and none of it is explained on your bill. Most people know they're probably overpaying for their electricity, they just don't have the tools to figure out by how much or what to do about it.

At Nura, we think your electricity bill should be transparent. You shouldn't need to become an energy policy expert to know whether you're on the right plan or how to save money every month on your bills. That's why we're building Nura. We connect to your meter data, show you what's actually driving your costs, and tell you whether a different plan would save you money. We're starting with PG&E customers in the Bay Area. Join the beta waitlist here.