War's Economic Impact Worsens for Americans

Iran's closure of the Strait of Hormuz disrupts global supply chains, driving up prices and sparking fears of recession.

Apr. 5, 2026 at 6:34pm

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The ongoing conflict between the U.S., Israel, and Iran is taking an increasing toll on the American economy. The closure of the Strait of Hormuz has disrupted global energy and commodity markets, leading to rising prices for fuel, consumer goods, and industrial inputs like fertilizer and helium. While the U.S. has so far avoided the worst of the economic fallout, experts warn that prolonged disruptions could push the country into recession.

Why it matters

The war's impact on global trade and energy supplies threatens to undermine the U.S. economy's recent strong performance, which has been buoyed by factors like job growth and the president's tax policies. Higher prices for essentials like gas and groceries could erode consumer confidence and spending, while supply chain disruptions could hamper production across multiple industries.

The details

The closure of the Strait of Hormuz, a critical global chokepoint for oil shipments, has sent energy prices soaring. Gasoline prices in the U.S. have topped $4 per gallon, while diesel, which powers freight and agriculture, is nearing an all-time high. The disruption to oil and gas supplies has also impacted the production of other key industrial inputs like petrochemicals, fertilizer, and helium. Manufacturers across sectors are facing shortages and rising costs, which they are passing on to consumers.

  • The Strait of Hormuz was closed in early April 2026, disrupting global energy and commodity markets.
  • Gasoline prices in the U.S. have risen above $4 per gallon since the conflict began.
  • Diesel prices are approaching an all-time high of $5.82 per gallon, set after Russia's 2022 invasion of Ukraine.
  • Mortgage rates have risen to their highest level in seven months due to the economic uncertainty.
  • The U.S. economy added 178,000 jobs in March, before the full impact of the war was felt.

The players

Donald Trump

The president who has suggested the war could end later this month and told the nation the conflict was 'nearing completion.'

Rachel Ziemba

A New York-based analyst who advises corporations on geopolitical risk, warning that the U.S. will not avoid the economic fallout from the war.

Robert McNally

The president of Rapidan Energy Group, a policy analysis firm in Washington, D.C., who says the U.S. will experience price shocks but likely avoid shortages if it does not ration.

Lars Jensen

The chief executive of Vespucci Maritime in Copenhagen, who notes the disruption to global supply chains, including a 'mountain of empty reefer containers' trapped in the Gulf region.

Krista Swanson

The chief economist of the National Corn Growers Association, who warns that the war's impact on fertilizer prices could be an issue for farmers for the 2027 crop year.

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What they’re saying

“I don't think the U.S. will avoid it. These are global markets.”

— Rachel Ziemba, New York-based analyst

“We will only have shortages if we ration. Otherwise, we'll experience price shocks.”

— Robert McNally, President of Rapidan Energy Group

“You have an enormous mountain of empty reefer containers in the Gulf countries. Right now they can't get out. But those reefers are now needed to be moved to other places in the world where harvesting season is coming.”

— Lars Jensen, Chief executive of Vespucci Maritime

“If this continues on, this will be an issue for all corn growers for the 2027 crop.”

— Krista Swanson, Chief economist of the National Corn Growers Association

“The sooner this war is over, the better.”

— Michael O'Leary, Head of Ryanair

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

The war's disruption of global supply chains and energy markets threatens to undermine the U.S. economy's recent strong performance, with higher prices for essentials like gas and groceries potentially eroding consumer confidence and spending. Prolonged disruptions could push the country into recession, highlighting the vulnerability of the U.S. to geopolitical conflicts despite its relative insulation from the worst effects.