How an Iran war could shake or destroy the US economy

2026-05-01 07:59:00, Kosova & Bota CNA

A prolonged conflict between the US and Iran is being seen by economists as a serious risk to American economic stability, raising fears of high inflation, reduced purchasing power and long-term changes in consumer behavior.

At the center of concern is the direct impact of the war on global energy supplies, particularly through the Strait of Hormuz, a key route for oil transportation. Any disruption in this area causes immediate increases in oil prices, reflected in higher fuel and commodity prices in the US.

According to experts, this phenomenon could lead to what is called “demand collapse” — a situation where persistent price increases force consumers to significantly reduce spending. Initially, households face higher energy costs, leaving less income for other consumption such as restaurants, travel or large purchases.

The consequences spread throughout the economy:

-Consumers lose confidence and postpone important purchases like cars or houses

-Businesses face falling demand and rising costs

-Investment and employment slow down, increasing the risk of unemployment

In this scenario, even the Federal Reserve may be forced to raise interest rates to curb inflation, which would further slow the economy.

In addition to energy, the impact extends to other critical sectors. Disruptions in the supply of fertilizers, natural gas, and industrial materials could raise the prices of food and technology products. Experts warn that the full effects may not be felt for months.

However, there are more positive signs. Oil prices have stabilized somewhat and a possible ceasefire has improved market sentiment. But economists stress that the situation remains fragile and could quickly deteriorate.

Even if the conflict ends quickly, recovery is not expected to be immediate. Energy production and supply chains could take months or years to return to normal levels.

Meanwhile, low-income families are most at risk, as they have less savings and financial flexibility. For many of them, this crisis could bring permanent changes to their standard of living.

Ultimately, economists warn that this is not just a temporary crisis, but could mark the beginning of a "new economic normal" for the US./ CNA