US-Iran MOU Signals Normalization But Higher Fossil Fuel Prices Will Cost Over $700 Billions in 2026

New analysis by 350.org shows that people and businesses will continue to pay a steep price for fossil fuel dependence, even if the Strait of Hormuz fully reopens and remains so. According to 350.org calculations, an estimated $374bn has already been transferred from households and businesses to the oil and gas industry through higher prices. Based on pricing scenarios of the International Monetary Fund, even with the Strait of Hormuz open, 350.org calculates that over $700bn ($667.2 bn- $702.3bn) will be siphoned from businesses and households to the oil and gas industry due to continued elevated prices by the end of the year. Damaged infrastructure, persistent supply risks and geopolitical volatility keep oil and gas prices are expected to keep fossil fuel prices above pre-crisis levels. A detailed breakdown of methodology and calculations is found below.

350.org’s estimates do not yet account for wider knock-on effects, including rising fertiliser and food costs, lower economic output and employment, or rising inflation driven by fossil fuel price volatility. As a result, the true economic damage is likely to be significantly greater than the direct losses from higher oil and gas prices alone

Andreas Sieber, Head of Political Strategy at 350.org said:

“The oil and gas industry is draining billions from people and businesses on the back of a war that has killed thousands and pushed millions toward poverty and hunger. Even if the Strait of Hormuz reopens tomorrow, we should expect prices to remain above pre-crisis levels. We witness not only a massive fossil fuel crisis but a vast upward transfer of wealth built on instability of fossil fuel markets and pain. Governments should tax these excess profits now and use the revenues to protect people, cut bills and rapidly deploy renewables that make households and small businesses less vulnerable to the next fossil fuel shock.”