{"id":318971,"date":"2026-03-08T09:40:15","date_gmt":"2026-03-08T09:40:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/nz\/318971\/"},"modified":"2026-03-08T09:40:15","modified_gmt":"2026-03-08T09:40:15","slug":"america-cant-afford-trumps-war-with-iran-for-long","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/nz\/318971\/","title":{"rendered":"America can\u2019t afford Trump\u2019s war with Iran for long"},"content":{"rendered":"

The U.S. economy right now is like the hero of an action movie in the last few minutes: bloodied, but resilient.<\/p>\n

After facing everything from stubborn inflation to sweeping global tariffs to\u00a0a record-breaking\u00a0government shutdown, America has somehow managed to avoid a recession and soldier on.\u00a0The labor market, though, is showing bruises as U.S.\u00a0employers\u00a0reported cutting<\/a>\u00a092,000 jobs in February.<\/p>\n

But, as in an action movie, the economy is now up against its biggest foe yet: a costly war in Iran,\u00a0a regional power in the Middle East\u00a0that just happens to sit next to what is arguably the world\u2019s most critical maritime energy chokepoint.<\/p>\n

The blows are already coming. The war is costing the U.S. an estimated $1 billion a day<\/a>, according to two congressional sources with knowledge of the matter. Oil prices are now forecast to go higher, while gas prices have already jumped to $3.32<\/a>. It\u2019s the highest price it has reached in either of Trump\u2019s two terms. The situation is so in flux that gas prices are poised to climb higher than that after this article is published.<\/p>\n

The knock-on effects of increasingly expensive oil will be felt next. <\/p>\n

The knock-on effects of increasingly expensive oil will be felt next. Higher costs for oil and gas will spread to the costs of other goods and services, particularly those relying on trucks for transportation. Higher prices for airline tickets aren\u2019t out of the question. Grocery bills and electricity prices will also follow suit if the war drags on.<\/p>\n

The war with Iran almost instantly wrecked forecasts for lower oil prices<\/a> this year, one of the only slices of the U.S. economy that had been getting cheaper for consumers. Analysts had previously expected Brent crude to trade at about $60 per barrel in 2026. Instead, Brent crude rocketed to $93 per barrel as of Friday due to the conflict.<\/p>\n

On Wednesday, Goldman Sachs published a worst-case scenario in which $100 per barrel of oil becomes a reality in five weeks. That was based on whether Iran managed to choke off oil shipments in the Strait of Hormuz, the Persian Gulf waterway near Iran that accounts for one-fifth of global oil and natural gas shipping. It did, and Goldman quickly updated its forecast<\/a> for oil prices to cross into dreaded triple-digit territory as soon as next week.<\/p>\n

Mark Zandi, chief economist at Moody\u2019s Analytics, recently\u00a0said<\/a>\u00a0\u201ca good rule of thumb\u201d is to assume that for every $10 per barrel increase in oil prices, the cost of a gallon of regular unleaded will rise by 25 cents. Prices at the pump usually move in tandem with crude oil, which quickly climbed after the first wave of U.S.-Israeli airstrikes that killed Iran\u2019s supreme leader, Ayatollah Ali Khamenei.<\/p>\n

The country\u2019s clerical regime does have incentives to drive up global oil prices as high as possible in a last-ditch effort to ensure its survival. The Iranian military has\u00a0already targeted<\/a>\u00a0power plants and oil refineries in the Gulf, and the\u00a0financial fallout of the war stands to get worse if nothing changes. Qatar\u00a0warned on Friday<\/a>\u00a0oil prices may reach $150 per barrel within three weeks if the war shuts down commercial traffic in the Strait of Hormuz.\u00a0<\/p>\n

So far, this latest war has only intensified across the Middle East. Trump\u00a0has stated<\/a>\u00a0he believes the U.S. will keep up its air-and-sea offensive against Iran for four or five weeks, adding, \u201cwe have capability to go far longer than that.\u201d Indeed, Defense Secretary Pete Hegseth raised a scenario in which the war lasts eight weeks.<\/p>\n

Trump has railed against \u201caffordability\u201d and even\u00a0called it \u201ca hoax\u201d<\/a>\u00a0during an economic speech late last year. So it wasn\u2019t surprising to hear him\u00a0downplay<\/a>\u00a0a possible long-term spike in gas prices this week.\u00a0<\/p>\n

\u201cI don\u2019t have any concern about it. They\u2019ll drop very rapidly when this is over, and if they rise, they rise,\u201d the president\u00a0told Reuters<\/a>\u00a0in a Thursday interview. Yes and no.<\/p>\n

\t\t\t\t\t\t\t\t\tPlay<\/p>\n

\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\"\"\t\t\t\t\t\t\t<\/p>\n

Even if the U.S. and Israel call off their military campaign in the next two or three weeks, gasoline prices could remain elevated for a while. Economists have named<\/a> this tendency \u201crockets and feathers.\u201d Gas prices shoot up like a rocket overnight. But those same prices fall delicately like a feather over many weeks.<\/p>\n

Still, the U.S. is better able to withstand an oil shock than in the past. It enjoys a privileged position as\u00a0the world\u2019s top oil driller<\/a>, so it\u2019s not as dependent on foreign oil supplies as it was two decades ago\u00a0when it launched the\u00a0second Iraq War. Still, that doesn\u2019t mean the U.S. economy is completely inoculated.<\/p>\n

Sugar prices\u00a0rose<\/a>\u00a0this week with the expectation of Brazilian mills stepping up production of ethanol instead of sugar as a cheaper fuel alternative.<\/p>\n

The Strait of Hormuz is associated with oil, but it\u2019s\u00a0also a vital artery<\/a>\u00a0for fertilizer transport. Fertilizer prices were already elevated prior to the Iran conflict, dealing a blow to American farmers coping with dwindling markets and lower crop prices.<\/p>\n

Now their spring planting budgets face more strain due to rising prices for urea, a version of nitrogen fertilizer often used for corn. Farmers facing fresh hardship could take it out on Republicans in the November midterms.<\/p>\n

Many companies spent the past year reshuffling supply chains to avert Trump\u2019s double-digit tariffs. The war is jolting them anew. The top five largest container shipping firms, including Maersk, suspended their operations in the Persian Gulf,\u00a0per trade analyst<\/a>\u00a0Jacob Jensen at the American Action Forum.\u00a0<\/p>\n

Instead of traveling through the Suez Canal, the companies are sending their cargo fleets around the Cape of Good Hope\u00a0at the tip of South Africa. The fraught, dangerous environment caused them to add surcharges ranging from $1,500 to $3,500 per container.<\/p>\n

The building blocks of prolonged uncertainty are all falling into place. <\/p>\n

The building blocks of prolonged uncertainty are all falling into place. Trump remains devoted to his tariffs, which affect just about everyone in the U.S. The White House is scrambling to rebuild a 15% universal tariff regime that the Supreme Court knocked down. If the war in Iran stretches on for months, it will magnify\u00a0the expected price increases<\/a>\u00a0for food, furniture and much more.<\/p>\n

Trump continues lashing out at long-standing allies, particularly in Europe. Recently, Spain caught the brunt of his fury when the government refused to allow U.S. warplanes to use their bases for the Iran war. Trump then threatened to cut off trade with Spain, a member of NATO and the European Union. No one knows which country will land in hot water with the president next.<\/p>\n

Still, don\u2019t count out the U.S. economy just yet. Reports of its demise\u00a0have been greatly exaggerated\u00a0before. Famously, it defied a 100% probability call<\/a> for a recession in 2023 made by Bloomberg Economics models.<\/p>\n

Only time will tell if the economy keeps going despite sustaining so many body blows, or if it\u2019s knocked down by another war in the Middle East. The longer the war goes on, though, the harder it will be to stay standing.<\/p>\n

\t\t\t\"\"\t\t<\/p>\n

\n\t\t\t\t\t\tJoseph Zeballos-Roig\t\t<\/p>\n

\n\t\t\t\t\t\tJoseph Zeballos-Roig is a reporter who has covered economic policy and politics for Semafor, Business Insider and Quartz, among other publications.\u00a0\t\t<\/p>\n<\/p>\n

\"MS<\/p>\n

\u00a9\u00a02026 Versant Media, LLC<\/p>\n

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