How War in the Persian Gulf Could Spill Into the U.S. Economy
The New York Times • • nation
Key Points:
- The U.S. and Israeli attacks on Iran have triggered oil price shocks and risk escalating into a financial crisis, both of which historically lead to U.S. recessions.
- The conflict has disrupted trade and damaged key facilities across the Middle East, with significant impacts on oil supply through the Strait of Hormuz, a critical passage for 20% of the world’s oil.
- Oil prices have surged about 15% since the fighting began, with diesel and gasoline prices reaching their highest levels since late 2023, and could rise further if the conflict persists.
- Prolonged fighting could severely strain the U.S. economy and increase costs for taxpayers, while a cease-fire within a week could allow trade flows and oil prices
