Why the U.S.-Iran Conflict Could Send Your Summer Utility Bills Surging

Even after a two-week ceasefire was announced Tuesday between the United States and Iran, American homeowners may still be headed into a summer of surging utility costs as a result of the conflict.

When energy demand surges during peak cooling months, utility companies rely on "peaker plants"—backup units fueled by natural gas and oil. Because the recent five-week conflict in the Middle East has sent wholesale energy prices toward all-time highs, the ripple effects may already be working their way toward your monthly statement.

“A global energy shock may start with oil or fuel markets, but households experience it through monthly bills, reliability concerns, and the cost of staying cool during periods of extreme heat,” Mark Wolfe, executive director of the National Energy Assistance Directors Association, explains to Realtor.com®.

The future of the Strait of Hormuz—an essential global shipping lane responsible for shepherding 20% of the world’s oil and liquefied natural gas—represents an even more immediate pressure.

It’s unclear if or when tankers will be able to resume their regular traffic, or when the dozens of refineries, storage facilities, and oil and gas fields that depend on that shipping lane will resume normal operations—and as long as supply remains muted, prices could stay high. 

That continued price shock could risk breaking the already strained budgets of American families, according to Wolfe.

“We know 1 in 6 U.S. households is already behind on its energy bills, and nearly 40% of households earning under $50,000 report having been unable to pay an energy bill at least once in the past year,” he says.

‘All roads now lead to higher prices’

International Monetary Fund Managing Director Kristalina Georgieva told Reuters in an interview Monday night, “All roads now lead to higher prices and slower growth,” adding that even if the war ends soon—as the ceasefire announcement suggests—she still expects growth to slow.

Her warning reflects how deeply entrenched energy is within the broader economy, seeping into everything from fuel and food to construction and consumer goods.

To Wolfe, this compounding effect is the primary danger facing families. 

“The main point I would emphasize is that households do not experience these pressures separately,” he says. “If fuel prices are rising at the same time summer electricity demand is high, families get hit from multiple directions at once: at the gas pump, on utility bills, and often through higher food and transportation costs as well.”

And while the broader economic threat may be more existential, the conflict’s impact on natural gas offers a clear illustration of how energy shocks still find a very direct path into homeowners' bills. 

Despite the U.S. producing nearly all the natural gas it consumes, the market is no longer isolated. 

President Donald Trump made increasing exports of natural gas an early priority for his administration, and forecasts from the U.S. Energy Information Administration show that goal is on track, with exports projected to beat their annual records through 2027. 

But now, global allies are under pressure from the war in Iran, and as America exports more of this essential supply to support their needs, domestic prices become tethered to global volatility.

The 2022 energy crisis following Russia’s invasion of Ukraine offered a poignant example of this. Following the invasion, U.S. fuel and natural gas prices went on a five month run before regulating about a year later, according to data from the Federal Reserve Bank of St. Louis.

But even short runs can have an outsized impact on homeowners. Natural gas generates more than 40% of American electricity, and states that rely heavily on the fuel—like Pennsylvania, Delaware, Mississippi, Florida, and Louisiana—are especially exposed to these price increases.

Peak season approaches

It’s a prescient warning as the country heads into what is forecast to be a long, hot summer.

Summer peak demand is forecast to grow by 224 GW over the next 10 years, according to a report from North American Electric Reliability Corp. That would represent a 69% increase over the 2024 forecast—an apt representation of how strained the grid has become.

“Existing grid pressures can absolutely worsen the household experience of a broader energy shock, especially during the summer,” says Wolfe, noting that these preexisting strains have already reduced the margin of error for families, and any further volatility would only cut deeper.

Wolfe emphasizes that for households, the goal should be early intervention to avoid a financial spiral. 

“Too many families wait until they are already facing disconnection or an unmanageable bill balance,” he says. “Households should contact their local LIHEAP office, community action agency, or utility customer assistance office as soon as they see bills becoming difficult to manage.”

The Low Income Home Energy Assistance Program is a federally funded initiative that provides one-time payments for utility bills and upgrades to increase efficiency, all with the intention of preventing shutoffs before they happen.

He also recommends asking your utility company about budget billing plans that spread out price spikes across multiple bills and can make costs more predictable. Simple efficiency upgrades can also go a long way later. Things as small as changing an HVAC filter or sealing obvious air leaks provide the marginal improvements that add up over a season of high use.

But those efforts can only go so far, he adds.

“Households cannot conserve their way out of a major affordability crisis. When prices spike, assistance matters,” he adds. “Programs like LIHEAP remain one of the only meaningful buffers for families that are already stretched thin.”