Where you live determines the impact the war in Iran has on your personal finances, according to an analysis by Oxford Economics.

Since the U.S. and Israel launched attacks on Iran, the economic fallout has included rising oil prices and volatility in equity markets. Oil prices are of particular note because consumers feel the pinch at the gas pump in an environment where they are already sensitive to further pressures on affordability.

Oil prices have increased because Iran borders the Strait of Hormuz, a narrow waterway in the Persian Gulf through which exports from the UAE, Qatar, Kuwait, and Iraq all flow. Some 20 million barrels of oil typically flow through the strait every day, about 20% of the global oil supply. Iran has said it controls the strait, littering it with mines, and ship captains are too nervous to enter the waterway, choking off global supply and sending prices spiraling.

However, other pockets of the economy are also impacted by disruption in the strait: Fertilizers are a by-product of gas production, driving inflation in agriculture costs. There’s only a certain margin of costs that producers can absorb before they need to pass it on, with consumers ultimately footing the bill in another very visible way. Additionally, higher gas prices aren’t just borne by consumers but businesses as well: Transportation costs for farm equipment, commercial shipping, trucking, and delivery services have also increased as a result of the disruption.

The conflict in Iran, and the increase in oil prices as a result, have a “disproportionate” impact on low-income households because they spend a larger portion of their budgets on fuel, food, and utilities—the prices of which have increased because of the war, according to Barbara Denham of Oxford Economics.

“Metros where households spend the highest share on these commodities are largely in the South, in West Virginia, or scattered across the Midwest,” Denham noted. “Most are relatively small.”

Families living in Jackson, Hattiesburg, and Gulfport (Miss.), St. Joseph, Mo., and Des Moines are among those feeling the sharpest end of the increases, the report added, as households in these metros spend an average of 16% of their total budget on groceries, fuel, and utilities. Unsurprisingly, these areas also have high levels of low-income households earning less than $35,000, and tend to be smaller and more remote locations.

The extent of the damage to household finances resulting from increases in oil prices depends not only on how long the conflict continues and how it is resolved, but also on how quickly trade routes reopen. A matter of weeks ago, Wolfe Research chief economist Stephanie Roth said “food at home” inflation might rise by roughly two percentage points, adding about 0.15 percentage points to headline inflation.

An update this week from Britain’s IGD (Institute of Grocery Distribution) suggested food inflation could increase from the country’s current rate of 3.6% to over 8% by June.

At the other end of the spectrum, West Coast and Northeastern metros spend less of their overall budget on groceries, utilities, and fuel. Families in Seattle, Ithaca, N.Y., Lakeland, Fla., Vineland, N.J., and Phoenix spend approximately 11% or less of their total budget on these three costs.

“While we believe that higher energy prices should have more of an impact on headline inflation than on growth, at least over the short term, the psychological impact of both the war and soaring gas prices is already registering on consumer sentiment surveys,” noted Denham. “We still forecast positive consumer spending growth of 1.9% this year … but we have lowered our GDP growth forecast from 2.8% to 2.4% due to the impact of higher oil prices and uncertainty weighing on consumer spending.”

A bump for some

While a bump in oil prices isn’t the most welcome news for consumers, it’s a silver lining for the oil drilling and gas mining sector. In 2020, the U.S. became a net exporter of petroleum for the first time since at least the 1940s, according to the U.S. Energy Information Administration.

Therefore, certain areas—and a handful of states—will see an upward tick in growth courtesy of the new supply and demand equilibrium. More than half of drilling GDP is generated, unsurprisingly, in non-metro counties: The Permian Basin in West Texas (which also includes counties in New Mexico) accounts for 35% of total mining and drilling GDP and 12% of those jobs.

“While we forecast that mining GDP will increase marginally in these counties, the impact on job growth will be more muted as firms can ramp up production in the short run,” Denham added.

Areas heavily involved in the refinery process also stand to gain, observed Denham: “The refined oil sector will also see a short-term uplift in GDP due to the jolt to oil prices. Refineries differ somewhat from drilling in that they are partly concentrated in Texas (Houston, Beaumont, Corpus Christi, and Dallas) but also have a large presence in Los Angeles, Chicago, New Orleans, Minneapolis, San Francisco, and Bellingham, Wash. Indeed, the top 10 metros account for 50% of refining GDP and a third of the jobs.”