Many Americans hoping to receive a number of tax advantages from the passage of the One Big Beautiful Bill Act (OBBBA) in 2025 may see those refund gains disappear if oil prices continue their upward climb.
Find Out: 5 Everyday Items That Will Become More Expensive If the Iran Conflict Continues
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Higher gas prices — and, as a result, higher energy costs overall — are an expected consequence of America’s recent ongoing involvement in airstrikes against the oil-rich country of Iran. An unexpected consequence, though, is the possibility that energy costs will become so high that they cancel out the tax benefits that many households receive from the OBBBA.
As reported by CNBC, oil prices have precipitously risen following the start of the American-Iranian conflict that began on Feb. 28, jumping from roughly $67 per barrel in February to $88 by the end of the first week of March. This increase could cost Americans at least $150 billion more on gasoline — that’s far more than the expected $129 billion in tax relief expected from the OBBBA.
Learn More: I’m an Economist: 5 Ways the Iran War Could Impact Your Retirement Savings
Essentially, the OBBBA tax advantages and refunds would be effectively wiped out by the added energy costs for the average American home. Gas and energy costs are a primary expenditure for nearly every American household, and the costs of the war with Iran could siphon away the average household’s OBBBA refund benefits.
If the war were to resolve shortly, though, the impact upon your OBBBA tax benefits would be mild to moderate. However, should the conflict continue, and should oil prices remain staggeringly high compared to their average levels, the more noticeable the impact will be upon your household finances — and how much of your tax refund you have to spend on them.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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This article originally appeared on GOBankingRates.com: Rising Oil Prices Could Erase Your Tax Refund Gains
