How will the war on Iran impact the US economy?

"If it drags on and especially if it remains at this intensity, prices will be higher, and more volatile for consumers. If it ends quickly, and it's a credible and stable end, then we could see prices fairly quickly normalising."

"The war in the Middle East is creating the largest supply disruption in the history of the global oil market, according to the International Energy Agency report released Thursday."

"In the past, when oil prices have reached 4 percent to 5 percent of gross domestic product and stayed elevated, that's always triggered a recession. The US will not hit that threshold as quickly as it would have in the 1970s, when its economy was more deeply dependent on foreign oil."

Following US-Israel strikes on Iran, oil prices have surged above $100 per barrel as the Strait of Hormuz remains closed due to Iranian warnings and continued ship strikes. The economic impact on US consumers depends critically on conflict duration and shipping traffic resumption timing. Short-term resolution could allow price normalization, while prolonged conflict risks 1970s-style stagflation or recession. The International Energy Agency reports this represents the largest supply disruption in global oil market history. Economists warn that if oil prices remain elevated around $140 per barrel for extended periods, recession becomes likely, though the US economy is less dependent on foreign oil than during the 1970s crisis.

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