The Iran war's economic blowback is getting real

"Oil skyrocketed 25% overnight, to just under $120 a barrel, fueling worries that higher energy costs will stoke inflation and curb spending by U.S. consumers. Patrick De Haan - a widely cited gas price expert and an analyst for GasBuddy - estimates there's an 80% chance the national average gas price will hit $4 per gallon in the next month."

"The war has already caused the largest oil disruption in history, taking out roughly 20% of the world's supply, according to Bob McNally, president of Rapidan Energy and a former George W. Bush energy adviser. Iran is seeking to block the Strait of Hormuz, which connects the Persian Gulf with the rest of the world, and is threatening to attack ships that seek to pass through."

"Japan's Nikkei index was down 5.2% and South Korea's KOSPI down 6%, reflecting those economies' more direct dependence on Middle Eastern oil now at risk of a protracted blockade. The odds of a U.S. recession this year spiked to 38% in overnight trading on Polymarket, from 24% at the start of the month."

Oil prices skyrocketed 25% overnight to just under $120 per barrel, reaching levels not seen since Russia's invasion of Ukraine four years ago. This surge is driven by Iran's threats to block the Strait of Hormuz and attack ships, creating the largest oil disruption in history by removing roughly 20% of global supply. Gas price expert Patrick De Haan estimates an 80% probability that national average gas prices will reach $4 per gallon within a month. The oil price increase is expected to rapidly translate into higher retail gasoline costs, already up 51 cents per gallon. Stock markets globally are declining sharply, with S&P 500 futures down 1.3%, Japan's Nikkei down 5.2%, and South Korea's KOSPI down 6%. Recession odds spiked to 38% from 24% at month's start, reflecting concerns about inflation, reduced consumer spending, and broader economic contraction.

Read at Axios