About 77 percent of Michigan homes rely on natural gas for heat. As families finish a summer of $4 gasoline, the prolonged Iran war raises another pocketbook question: What happens to heating bills this winter?

ANN ARBOR — Michigan families are ending the summer driving season paying more than $4 a gallon for gasoline. Now another potentially expensive season is approaching.

Winter.

And for roughly three out of every four Michigan households, that means paying for natural gas to heat their homes.

Michigan regular gasoline averaged $4.03 a gallon on Labor Day, according to AAA, compared with $3.18 a year ago — an increase of about 85 cents a gallon.

Diesel averaged an even more painful $5.89 a gallon, more than $2 above last year’s price.

Now the prolonged Iran war and continuing disruption around the Strait of Hormuz raise another question for Michigan families:

Could the conflict eventually increase the cost of heating your house, too?

The answer isn’t certain. Strong U.S. natural-gas production and inventories provide significant protection.

But the longer the Iran war continues, the greater the risk that the global energy crisis could reach Michigan consumers through more than the gasoline pump.

HOW DOES MICHIGAN HEAT ITS HOMES?

Natural Gas — About 77%

Roughly three out of every four Michigan homes rely on natural gas for heat, making natural-gas prices the biggest winter heating issue for Michigan consumers.

Propane — About 8%

Propane is particularly important in rural Michigan. It heats about 18 percent of Upper Peninsula homes and nearly 24 percent of homes in some northern Lower Peninsula counties.

Michigan uses more propane for residential heating than any other state.

Heating Oil — Tens Of Thousands Of Homes

A much smaller number of Michigan households use No. 2 heating oil and other petroleum distillates. Those households are more directly exposed to the global petroleum market that also influences diesel prices.

Michigan’s Big Advantage — Natural-Gas Storage

Michigan has about 10 percent of the nation’s available underground natural-gas storage capacity, more than any other state.

That provides an important cushion against sudden winter supply disruptions.

THE BIG WINTER QUESTION: Will America’s abundant natural-gas supply be enough to protect Michigan heating bills if the Iran war continues and winter turns unusually cold?

Iran War Already Hitting Michigan At The Pump

For gasoline and diesel, the connection to Iran is already apparent.

The Strait of Hormuz is one of the world’s most important energy shipping routes. Continuing disruptions have reduced tanker traffic and helped push crude oil prices back toward $100 a barrel.

Brent crude was trading near $97 Monday, while West Texas Intermediate was around $92.

Michigan motorists are already seeing the consequences.

AAA puts the statewide regular gasoline average at $4.03, while Metro Detroit is averaging $4.11 and Ann Arbor about $4.12.

Normally, Labor Day brings the beginning of relief. Summer vacations end, driving declines and gasoline demand falls.

But the Iran conflict could interfere with that normal seasonal decline.

Patrick De Haan, head of petroleum analysis for GasBuddy, recently told MITechNews that several forces are hitting Michigan gasoline prices simultaneously.

“Price increases in Michigan have been driven by many factors, including refinery outages that happened from severe weather last week, but also the price of oil, and countless Ukraine attacks on Russian oil refineries,” De Haan said.

“The Iran situation isn’t over, it’s still impacting prices, just as Ukraine attacks on Russian oil refiners that is still very influential.”

Could Iran Raise Your Natural-Gas Bill?

The connection between Iran and the furnace in a Michigan basement is less direct — but increasingly important.

Michigan isn’t dependent on Iranian natural gas. America produces enormous quantities of its own gas, and current U.S. inventories provide a substantial buffer.

But the United States is also becoming a major supplier of liquefied natural gas, or LNG, to the rest of the world.

The Iran war has disrupted LNG shipments from the Persian Gulf, including supplies originating in Qatar and the United Arab Emirates. That has driven international LNG prices sharply higher.

American natural gas suddenly becomes more attractive to overseas buyers when supplies elsewhere are disrupted.

U.S. LNG exports were already up 23 percent during the first half of 2026 as additional American export capacity came online.

That doesn’t mean Michigan heating bills are about to soar.

U.S. LNG terminals have limits on how much gas they can export, while strong domestic production and large inventories provide protection for American consumers.

The danger would be a combination of events: a prolonged Iran war, growing U.S. LNG exports, falling domestic inventories and a colder-than-normal Michigan winter.

Under that scenario, more buyers could be competing for American natural gas just as Michigan households need more of it.

Rural Michigan Has Another Risk

For hundreds of thousands of rural Michigan households, the winter fuel question isn’t natural gas.

It’s propane.

The Michigan Public Service Commission says about 8 percent of Michigan households use propane for home heating, with dependence substantially higher in northern Michigan and the Upper Peninsula.

Unlike natural gas supplied by regulated utilities, Michigan propane prices aren’t regulated.

In June, the MPSC was already encouraging propane customers to shop early, compare suppliers and consider fixed-price or pre-buy programs that can provide some protection against price volatility during heating season.

That’s potentially more important now.

Households using heating oil face another risk because heating oil is closely connected to the petroleum markets already driving diesel prices higher.

Michigan Businesses Get Hit Too

Higher winter energy costs wouldn’t stop at household budgets.

Patrick Anderson, principal and CEO of Anderson Economic Group in East Lansing, told MITechNews that Michigan’s manufacturing-heavy economy is particularly vulnerable to higher energy prices.

“Higher oil prices hurt Michigan’s economy two ways: first, it makes our manufacturing and agricultural products more expensive to build and get to market. Second, it discourages people from buying cars,” Anderson said.

High diesel prices raise trucking and shipping expenses.

Higher natural-gas prices would add another cost because Michigan manufacturers use natural gas for heating and numerous industrial processes.

Those costs can eventually work their way into consumer prices.

From Filling The Car To Heating The House

That’s what makes Labor Day 2026 an important dividing line.

Michigan consumers spent the summer watching gasoline climb above $4.

The end of the summer driving season would normally bring some relief.

Instead, the Iran war continues. Oil is again approaching $100. Michigan diesel is approaching $6. And the state is beginning its transition toward winter heating season.

There is good news: abundant U.S. natural-gas supplies and Michigan’s enormous underground storage capacity provide consumers with substantial protection.

But there is no guarantee.

For most Michigan families, the energy question is about to change.

Summer was about what it cost to fill the car.

Winter will be about what it costs to heat the house.

And if the Iran war continues, Michigan consumers could find themselves paying for the conflict during both seasons.