The Pentagon’s stated cost of Operation Epic Fury, $25 billion, has a way of sounding huge until you consider what it leaves out. Economists subtly destroy it in footnotes, while Defense Secretary Pete Hegseth makes headlines about it. When you take into account the disruption of the oil market, the decline in consumer confidence, and the grinding drag on economic output, a typical American household may be absorbing thousands to tens of thousands of dollars in true costs, according to Justin Wolfers of the University of Michigan. He admits that’s a wide range. But in some ways, the true story lies in the midst of that uncertainty.
Due to its ease of measurement, oil dominates the coverage. Since the start of the conflict, Brent crude has been trading between $20 and $25 more per barrel than its pre-escalation three-month average. The fact that futures markets for late 2026, 2027, and 2028 are still high indicates that traders are not viewing this as a blip. This week, West Texas Intermediate reached a new high of $86.12 on its November 2026 contract. That number is printable. It can be charted. What goes through a person’s mind when they can’t figure out how much anything will cost in six months is something you can’t chart as neatly.
We seem to consistently underestimate this second type of harm. In a piece for MarketWatch, Naeem Aslam puts it simply: if prices remain steady and predictable, markets can absorb costly energy. The volatility is what destabilizes the system, not the cost per se. Airline profit margins and logistics contracts are not the only things negatively impacted by a market that swings between $95 and $130 per barrel. It stops regular people from making decisions about whether to sign a lease, take a new job in a different city, or have more children. Planning is taxed by war, and those without the financial resources to handle the uncertainty bear the brunt of this tax.
This conflict’s mental health component is still being measured in preliminary, insufficient ways. The psychological effects of direct military threat are documented by reports from Iranian civilians, including disturbed sleep, grief, and the impossible calculations of everyday survival. However, the psychological toll extends beyond the battlefield.
Consumer confidence has plummeted in the US. Economists can quantify that through survey data, but the surveys only capture a portion of what it’s really like to see fuel prices rise, hear the headlines every night, and wonder how far the disruption will spread. There is widespread anxiety. Spending patterns, dinner table conversations, and whether young workers think the economy will be stable enough to take professional risks are all impacted.
With remarkable clarity, Marcelo Carvalho outlines the longer-term transmission channels in a piece for the ODI. He contends that, in addition to the immediate oil shock, the Iran crisis is hastening a structural change in the way the world economy functions, moving from just-in-time to just-in-case and from efficiency to resilience.
There is a cost associated with that shift. In general, a more fragmented global economy is less effective and more vulnerable to inflation. There has been an increase in the Caldara–Iacoviello Geopolitical Risk Index. The cost of insurance rises. Food security and energy become strategic priorities instead of presumptions. Almost all of that is inaccurately counted in the official tallies, but none of it is invisible.
It’s difficult to ignore the fact that those who bear the brunt of these expenses are the ones who are least likely to be included in economic models. Fuel is eating away at the freelance driver’s earnings. The owner of a small restaurant is unable to forecast her supply costs from week to week. In a setting where no one seems certain of anything, the young couple chooses to postpone purchasing a home. These are real people making real decisions under real pressure, not abstract economic entities, and the psychological burden of persistent uncertainty builds up in ways that don’t go away when the conflict finally does. Quarterly reports hardly ever mention anxieties that define a generation. However, they eventually appear in everything else.