Wall Street analysts say the surge in energy costs following the war with Iran could effectively cancel out the bigger tax refunds coming because of Trump's One Big Beautiful Bill Act.

According to financial advisers Raymond James, if oil prices remain around $20 a barrel higher than they were before the conflict, the extra cost Americans pay for gasoline could erase most of the benefit from the tax cuts.

'With the $25 move last week, if the oil price stays here, it essentially offsets the fiscal benefit from the One Big Beautiful Bill Act,' strategist Tavis McCourt wrote in a note to clients.

It comes as Trump on Tuesday told Iran to brace for 'death, fire and fury' for keeping the Strait of Hormuz shut before threatening its new leader Mojtaba Khamenei.

The President told Fox the new Supreme Leader will be unable to 'live in peace' and he was 'not happy with the appointment', having warned Iran he would have the final say over their leader. 

US Defense Secretary Pete Hegseth also said Tuesday will be the 'most intense day' of attacks on the country. It followed US and Israeli strikes on oil and gas facilities over the weekend, leading to blistering fires near Tehran. 

Meanwhile, Iran's Islamic Revolutionary Guard Corps reportedly announced that any Arab or European country that expels the ambassadors of the US and Israel will have 'full authority and freedom' to pass through the Strait of Hormuz. 

US crude closed at $67.02 a barrel on February 27, the day before the conflict escalated. It went above $110 on Monday and was trading around $88 on Tuesday morning. 

That roughly $20 jump in oil prices could have a massive impact on household budgets.

Gasoline now averages nearly $3.54 a gallon nationwide, according to the American Automobile Association. Trump said the short-term rise in energy prices is 'a very small price to pay' for achieving peace. 

McCourt estimates Americans could end up spending about $150 billion more on gasoline if oil remains at these levels.

By comparison, the Tax Foundation estimates the tax cuts in Trump's bill will deliver about $129 billion in benefits to consumers in 2025, mostly through tax refunds and lower withholdings. 

Senior Trump officials said earlier this year that millions of households could receive unusually large checks in early 2026 after unknowingly overpaying taxes throughout last year.