Iran attacks threaten US economy with more uncertainty around inflation, growth

Should gas prices rise significantly, air fares could also rise as airlines face bigger fuel costs. Shipping would also become more expensive, which could add to grocery prices.

Natural gas prices also jumped Monday, as roughly 20% of the world's gas travels through the Strait of Hormuz and a liquid natural gas plant was shut down in Qatar. That could raise heating prices in the U.S. Natural gas has already gotten 10% more expensive in the past year, thanks in part to spiking energy usage by data centers powering AI.

Still, economists noted that the U.S. economy is not as oil-dependent as it has been in the past, with most Americans now working in services, rather than manufacturing.

And other factors may help keep oil price increases relatively limited. Rory Johnston, founder of Commodity Context, an oil analytics firm, pointed out that oil inventories were quite high before the conflict, which helped keep prices in check. That's in sharp contrast to the winter of 2022, he said, when post-COVID supply chain problems had already pushed up oil costs even before Russia's invasion of Ukraine caused a much bigger spike.

Monday's increase “is a very minor spike relative to" what happened after Russia's invasion, Johnston said.

Businesses may pull back amid uncertainty

If the Iran war drags on for months, it could also torpedo business confidence, which could lead companies to invest and hire less, said Kathy Bostjancic, chief economist at Nationwide Financial.

“When there is an injection of new uncertainty into the business environment ... that's a hit to confidence," she said.

The result could be similar to the impact of Trump's tariffs, which did not raise prices as much as many economists feared, but did appear to weigh on job gains. Hiring in 2025 was the weakest, outside of a recession, since 2002.

Consumers sour further on economy

Even without a big inflation spike, a major risk for Trump is that Americans sour on his economic leadership.

According to surveys, Americans already have a gloomy outlook on the economy, largely because of the lingering effects of the price spikes of the past five years. Trump's attempts to portray the U.S. as in a “golden age” have had little impact on those attitudes.

A protracted conflict in Iran that raised gas prices would likely make it worse, Jacquez said.

“People generally don’t think that President Trump is focused on the things that they are focused on,” Jacquez added, “and what they want him to be focused on is the price of groceries. What they think he’s focused on are things like tariffs and foreign policy.”