Will the U.S. economy bear losses from a prolonged conflict?

U.S. consumer prices rose 3.3% in March 2026 from March 2025, according to the Labor Department on April 10. The increase followed a 2.4% gain in February 2026. In parallel, crude oil surged above $100 per barrel before cooling, while gasoline prices rose above $4 per gallon.

Administration discussions on Middle East conflict and energy markets

U.S. Treasury Secretary Scott Bessent discussed with President Donald Trump the market reaction and the likely path of the U.S. economy depending on how long the Middle East conflict lasts. Bessent said Asia and Europe would be the most vulnerable regions if energy prices rise, and he discussed potential Treasury measures if the conflict persists for 8–12 weeks.

Last month, the U.S. Treasury issued a short-term authorization allowing the sale of Iranian oil that was already offshore. A senior administration official said Kevin Hassett advised Trump on potential impacts on the U.S. economy, while White House spokesman Kush Desai said the administration has been working with business representatives on ways to mitigate the impact.

Energy price risks and inflation concerns

Jamie Dimon, chief executive of JPMorgan Chase, wrote in a recent letter to shareholders that if the conflict continues it could trigger significant and lasting shocks to oil and commodity prices, including restructuring of global supply chains. Dimon said this could contribute to persistent inflation and ultimately higher interest rates.

In recent weeks, executives of the three largest U.S. oil companies warned White House officials, including Energy Secretary Chris Wright and Interior Secretary Doug Burgum, according to people familiar with the matter.

Hormuz Strait closure and global supply constraints

Leaders say a prolonged closure of the Hormuz Strait—an oil and LNG shipping route carrying about 20% of the world’s oil and LNG daily—could severely tighten global fuel supply chains and worsen energy crises.

Chevron CEO Mike Wirth said at a Houston energy conference last month that financial markets have not fully priced the severity of constraints on physical oil flows. He said bottlenecks in the strait would be resolved in weeks, not months. Some leaders have expressed disappointment with the administration’s messaging, arguing that uncertainty about the conflict makes investment planning difficult.

A White House official said Trump’s energy team maintains regular contact with U.S. oil and gas leaders. After the conflict began, officials began discussing with industry leaders ways to mitigate supply disruptions and permit higher production.

Administration economic projections and industry warnings

Steve Moore, an economic adviser to President Trump, told the White House in March 2026 that if the United States withdraws from Iran within a month of the war’s start and the Hormuz Strait reopens, oil prices would fall back to about $70 per barrel. Moore also warned about what he observed from rising oil and gas prices.

Agriculture impact and fertilizer supply concerns

Caleb Ragland, president of the U.S. Soybean Association, said Agriculture Secretary Brooke Rollins recently told farm lobby groups that fertilizer price concerns related to the Strait’s closure would be conveyed directly to the President.

Ragland said in an interview: “Our view is this is almost an emergency for farmers, and we need that supply to be unblocked.” He said farmers’ messaging to Rollins and other officials aligns with others making the economic case that the conflict should not be prolonged.

According to the American Farm Federation, about half of global urea supply and nearly a third of ammonia supply typically passes through the strait.