Yves here. We will include the impact of Trump’s Iran war on household budgets in our update later today, but this issue the hot US topic of affordability, as in inflation plus sticky prices, is so important that it merits a separate discussion. This article focuses on the most immediate effect of the closure of the Strait of Hormuz and worries about the risk of durable reductions in oil output due to attacks on Middle East oil infrastructure, which is a rise in energy prices and how that alone will wind up increasing prices on a widespread basis. But the collateral damage of a protracted closure of the Strait of Hormuz goes beyond that. For instance, the New York Times has confirmed a concern we had raised earlier, that of higher food costs and shortage:
The longer the conflict in the Middle East continues, the greater the likelihood that people around the globe will pay more for food. And those in the most vulnerable countries could face hunger.
The Persian Gulf is a dominant source of fertilizer. Though the region is best known as a prodigious source of oil and natural gas, its abundance of energy has spurred the development of factories that make the raw materials for many types of fertilizer, especially those that deliver nitrogen.
Nitrogen fertilizers are essentially natural gas reconfigured as plant nutrients. They nourish crops that yield roughly half the world’s food supply.
For now, most factories in the Gulf that make nitrogen fertilizers are continuing to produce them. But delivering their wares to farmers is suddenly impossible, given the effective shutdown of the Strait of Hormuz, the narrow channel linking the Gulf to the Indian Ocean.
In addition, loss or reduction of other key inputs from Gulf-provided fuels with hit other important categories of goods, such as industrial chemicals. This will produce shortages and supply chain breakage. We say from Covid that the impact of supply chain squeezes led in most cases to a new, durably higher level for those products. The supply chain shock was rarely followed by a rollback (recall the spectacular increase in egg prices was the result of avian flu and flock-culling, not Covid).
Readers may argue that the piece below is not sophisticated, that for instance it does not even mention the loss of Qatari LNG and the effect that will have on energy prices. But that actually is the point. You don’t have to be sophisticated to see that citizens around the world will soon be facing higher costs based on highly visible oil price effect, as even more damage on other fronts is underway.
By Brian Garvey, assistant director of Massachusetts Peace Action. He is also an active member of the Raytheon Antiwar Campaign. Originally published at Common Dreams
We are one week into Trump’s war on Iran. Gas prices are already up more than 11%. The Dow Jones has erased all of its 2026 gains.
These are the real, immediate costs of a new war of choice. Wars in the Middle East are expensive, and ordinary people pay the price.
The War Tax at the Pump — and Beyond
Twenty percent of the world’s oil travels through the Strait of Hormuz. That path is now shut off. The results are predictable.
Every gallon of gas now carries a war tax. And this is only the beginning. War with Iran means the constant threat of strikes on oil facilities in Saudi Arabia, Iraq, or the UAE. Secretary Hegseth has said the campaign could last anywhere from three to eight weeks—and that the U.S. can “sustain this fight easily for as long as we need to.” As long as this conflict goes on, prices will stay up.
And it doesn’t stop at the pump. Oil prices affect the entire supply chain. Nearly everything Americans buy moves by truck at some point between the factory and the shelf. When fuel costs go up, shipping costs go up, and those costs get passed on to the consumer. Affordability was already the number one concern of voters going into 2026. People remember what it felt like when the grocery bill became something to dread. This war risks bringing that back.
The bottom line? You can’t say affordability is your top priority and then start a war in the Middle East.
Remember When They Wouldn’t Shut Up About the Dow?
When the Dow crossed 50,000 in February, Trump posted on Truth Social that he had hit it “three years ahead of schedule” and predicted 100,000 before he left office. Attorney General Pam Bondi was lampooned for bringing up the Dow during a hearing that had nothing to do with the stock market. Now that argument is in peril.
By Thursday, the Dow had wiped out all of its 2026 gains, turning negative for the year after dropping nearly 800 points on March 5th alone. The S&P 500 and Nasdaq are down too.
If the Dow at 50,000 was the administration’s achievement, so is the Dow at 47,500. You don’t get the credit without the blame.
The man who started this war spent years arguing against the cost of Middle East wars. That argument was central to his political rise.
At the 2016 Republican primary debate, Trump went after Jeb Bush directly: “Obviously the war in Iraq was a big fat mistake, alright? George Bush made a mistake… we should have never been in Iraq, we have destabilized the Middle East.” He mocked Jeb for taking five days to decide whether Iraq was a mistake. The crowd booed. Trump didn’t back down. That moment helped define his candidacy.
In his 2021 farewell address, Trump declared he was “especially proud to be the first president in decades who has started no new wars.” On election night 2024, he told supporters: “I’m not going to start a war. I’m going to stop wars.” His 2026 New Year’s resolution, posted publicly, was “peace on earth.”
Forty-eight hours after that resolution, he ordered a military raid on Venezuela. Two months later, he launched the war on Iran.
At a 2018 White House infrastructure event, he said: “We’ve spent $7 trillion in the Middle East. What a mistake… We’re trying to build roads and bridges that are falling down, and we have a hard time getting the money. It’s crazy.” He was right. Money spent on bombs cannot also be spent on schools, hospitals, and bridges.
The roads that were falling down when Trump gave that speech are still falling down. And now we’re adding another war to the tab—on top of tariffs already squeezing family budgets—with no clear goal and no plan for what comes next.
The People Know Better
A University of Maryland Critical Issues Poll found only 21% of Americans support U.S. strikes against Iran. Three-quarters said no before the first bomb dropped. They knew—from Iraq, from Afghanistan, from two decades of watching—what a war in the Middle East costs and how it ends. The gas prices and the stock market are just the receipts.
The work now is making sure that the majority speaks up.
This war is illegal and most Americans are against it. The cost is already hitting them at the gas pump, at the grocery store, and in their retirement accounts. If we have to pay at the pump, the politicians who started this war should pay at the ballot box.
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“Short term pain, long term gain” appears to be the talking point on the impending fuel price shock (via X).
Short term pain in billions, long term gain in pennies (for other people).
Lifted from yesterday’s thread on the Iran war.
Acacia
March 8, 2026 at 7:48 pm
I just mentioned this to a friend. His reply:
I can’t help but think of the little Biden stickers I saw on gas pumps after COVID.
Pointing at the price and saying “I did that!” with a smile.
Sounds like DJT is doubling down, though tomorrow he may forget everything he said today.
Those stickers crossed my mind riding home last night from my Daughter’s farm. Spring is coming, planting seasons, haying seasons and here comes higher diesel prices. Fertilizers prices too. Luckily they don’t plant corn but you can imagine the pain will be felt across the country in the agricultural sector.
I really hope someone creates those stickers so we can put them on the pumps around America. Good enough to hammer Biden on, why not Trump?
They’re available all over ebay and other sites.
ChrisRUEcon:
And I’m so old (and you may be too) that I recall when the Hillary Clinton Diehards were all a-blabber about “incremental change.”
It’s the usual problem with information in this over-media-ated and over-digitized baroque era: Lies, bullshit, and propaganda.
In the essay posted:
I don’t care much for “war of choice” because imperialism is always by choice:
These are the real, immediate costs of a new war of choice. Wars in the Middle East are expensive, and ordinary people pay the price.
Oh. The problem is gasoline prices, not the slaughter of Palestinians or Iranians.
Meanwhile, I don’t like the use of the adjective “this”: It’s slicing things too fine.
This war is illegal and most Americans are against it.
So is provoking a war in Ukraine. I just read an article here in Italy that 63 percent of Italians in a poll taken at the end of 2025 think that NATO provoked the war in Ukraine with the USA being most at fault. Also noting: The genocide in Palestine is illegal. (Have you seen Daniel Biss in the 9th district House race squirming?) The Venezuela adventure is illegal. Ecuador. The financial shenanigans in Argentina.
The Richard Kline essay archived here at Naked Capitalism and Kline’s analysis of the moral world of liberals comes to mind.
> The Richard Kline essay archived here at Naked Capitalism and Kline’s analysis of the moral world of liberals comes to mind.
Exactly this. Illegal wars are the ones chosen by the other team. So Serbia being bombed under Clinton, and Biden’s abject failure in containing BiBi’s bloodlust are neither illegal nor chosen. Complete and utter moral failure.
Making nitrogen fertilizer means turning nitrogen from the air (which cannot be used by plants) into ammonia (which can). This process requires hydrogen (currently obtained from hydrocarbons) and colossal amounts of energy – currently 1-2% of global energy use.
That energy requirement is the important bit. Nitrogen is available anywhere, and with a bit more energy you can get hydrogen from water. If energy were free, you could make ammonia anywhere; instead burning fossil fuels is currently the cheapest established way to cover the energy cost.
Phosphate and sulfur, though, those need to be physically transported.
From the NYT quote “Nitrogen fertilizers are essentially natural gas reconfigured as plant nutrients.”
Nope. They are essentially atmospheric nitrogen which has been reduced to ammonia, ammonia nitrate and other molecules using natural gas (the hydrogen and energy of the methane –CH4– in natl gas).
I’m a chemist by training and I have no issue with that statement. It’s not the natural way to state it but in its unnaturalness it highlights the author’s point, that the equation for reducing nitrogen on LHS to ammonia on RHS requires the oxidation of methane on LHS to other products on RHS (carbon dioxide and water or some combination thereof).
The essential truth us that if we are to have industrial ammonia, we need to consume methane and produce other hydrocarbons.
On a pedantic note, coal was used before massive switch to methane, but fertilizers were used much less in those years, I guess it was more expensive.
I must admit to being a little surprised by the lack of emphasis on US’ strategic goals in Iran and elsewhere. Iran war can be construed as a ‘mistake’ by an ill-equipped president, or it can be construed as a small piece in a large geopolitical game of attaining full unipolarity, principally via the containment of China.
Trump has indicated right from the start of this administration that they are prepared to inflict pain, if necessary, in pursuit of their goals. That includes the economic costs of tariffs, the diplomatic costs of outward belligerence, and now geopolitical and economic costs of war with Iran.
The kidnap of Maduro was never about US oil companies profiting from its oil — rhetoric notwithstanding. It was about denying alternative supply to US rivals, principally China. The attack on Iran is not to capture Iran’s oil or to attain regime change. I have difficulty believing the US elite did not know this could not be achieved. It’s rather about precipitating the events that we now see, an important effect of which is to block oil flows to China. Notice the attacks on Saudi oil rigs did not come from Iran, but from Israeli saboteurs. It is the US itself which does not want oil to move out and in the coming days, we will see this conflict switch to attrition, if it has not already, from both sides. This will continue for as long as is necessary to inflict severe pain on China, until it’s weakened enough to agree to US terms, or to force it to try something desperate and thereby embroil it in a disastrous war with its neighbours.
Philippines, Japan and South Korea, so far reluctant to get on board with US anti-China project, will now be compelled, owing to their extreme dependence on oil from the Gulf, to simply comply with US wishes and become forward bases for a war against China. Meanwhile, we can expect to see more Russian oil sabotage, theft etc., by the US and allies, to try and cut off supply to China and divert them to partner countries.
The assumption of prevailing commentary has been that rising costs of war suggest there has been a miscalculation by the ruling elite. This overlooks the fact that public opinion and wellbeing are entirely irrelevant to current US policy planning. ICE, Epstein files etc. are all efforts to keep Americans distracted, exhausted and controlled.
This is not a Trump policy. Trump may very well pay the political price of this war at the ballot, but should the Democrats replace Republicans, the war will be rebranded and continued until the ultimate goals are achieved or until the empire fails in its last ditch effort to retain global dominance.
“This is not a Trump policy. Trump may very well pay the political price of this war at the ballot, but should the Democrats replace Republicans, the war will be rebranded and continued until the ultimate goals are achieved or until the empire fails in its last ditch effort to retain global dominance.”
No, it’s not a Trump policy, but there is every reason to believe it is a Netanyahu policy imposed on Trump by documentation of his exploits with little girls. The empire’s failure in its last ditch effort to achieve global dominance should be official within weeks. That memo will quickly reach the slow-witted Trump, but the next question is what he does when he receives it. When he simply doubles down on domestic repression and moves to cancel the elections, will anyone — military, obviously not Democrats — finally rise up to check him?
I read a comment today at Policy Tensor arguing the closure of the Strait is the purpose of US policy, to hurt China and Europe and to force capital flight from the Gulf to the Western Hemisphere.
I hadn’t considered that the US may have approached this war as a hedge: heads I take Iran’s oil, tails I deny Gulf oil to everyone (and juice my profits from Western hemisphere oilfields I control). Perhaps we’re looking at this wrong and the lack of achievable military and political goals within Iran is a feature, not a bug?
Perhaps one of the goals is even setting up the eventual abandonment of Israel because the US is going to focus on the Western hemisphere? After all, like the hen and the pig in bacon and eggs, one of the partners in this war on Iran is involved but the other is *committed*. The US is at no risk of domestic attack and can retreat into its vast wealth and carelessness and tell the rubble of Israel “Aw shucks, we tried – good luck!”.
(The US may have chosen to attack now before Iran demonstrates an ICBM that puts its domestic politics in genuine danger…).
“I read a comment today at Policy Tensor arguing the closure of the Strait is the purpose of US policy…”
I’ve been waiting for weeks to see if anyone else noticed.
Was the leadership deck in Iran shuffled enough until that result was produced? Just a wild thought.
I’m sorry, this is a batshit crazy theory. Do not denigrate this comments section with this tripe. Seriously.
Occam’s razor points instead to underestimation of Iran’s means and will. One key assumption was they never never would because it would hurt them too.
In considering the analysis (which is intriguing but only that), it doesn’t require any belief that the US had an informed view of Iran’s capabilities. Indeed, it stems from the opposite, a knowledge that you don’t know. If we attack Iran, we might win. But we also might lose but (1) we won’t get bombed at home (2) our allies will be threatened and need us more, not less and (3) we can profit from the energy chaos in the short term and (4) quit being their protector, keep the dollar recycling and sell them stacks of weapons in the long run, so we can go home and prepare to fight China.
This is how the war on the Ukraine is being fought, as a hedged bet where the guaranteed losers are Europe. Why not Iran, too, with the Gulf states in the losing role?
They may not have expected Iran to wipe out their bases but that doesn’t change the strategy if closing the Strait and shaking down the Gulf as the price of reopening was the goal.
But I’ve seen your comments elsewhere rejecting it so I’ll stop holding it up to the light! :-)
This is not how this Administration thinks. The US does NOT want “energy chaos”. That is an even faster track to an epic midterms defeat AND Republican wipeout in state legislatures and gubernatorial elections.
And Trump wants to sell weapons to Europe.
The GCC sheikdoms stated that their investment strategies will have to take a pause, all things considered, since they will have to patch things at home,with food, supplies, lack of revenue, etc, etc., etc…?
Very plausible theory, because exploits with little girls brings down American presidencies, not imperialist mass murder of thousands of people, including little girls. Leaving the snark aside, Netyanhayu imposed the policy on Trump? I am not sure that there is anyone with passing acquaintance of social media who doesn’t already believe Trump is a paedophile. What has that done to threaten his presidency? Not a day passes without someone accusing Trump of eating children on Twitter. How is that Netanyahu holding secrets on Trump? It’s all public. Furthermore, I don’t think Trump much cares about any of it.
Let’s keep sights on the important structural aspects. Plans of war against Iran predate Trump. As do plans of war against China. US presidents are figureheads who execute state policy. They don’t make them.
never forget, trump bragged about being able to shoot someone on 5th avenue in the middle of the day without suffering any political consequences. iirc it was during the 2015 campaign.
The ratcheting visible efforts pushing in this direction occurred over decades. Eppstein, for a period, was a networker facilitating deepening of pro-Israel environment in political and business circles, and as we know from Mandelson “sub-affair”, lucrative insider trading could be even more enticing than pliable young women (or no so young, tastes differ), something that rich people can find without “expert help”.
But the “networking” was and is much wider than that.
Continuation, the US is attacking Iranian oil tankers. As suggested, the US, not Iran, aims to continue the blockade in the straight.
https://x.com/s_m_marandi/status/2030978659251597416
https://x.com/clashreport/status/2030970745707200670
Meanwhile, U.S. weapons for ANY other conflict are being used fast.
This is a world war scenario. In any case the straight remains closed and the world economy collapses along with world war. Perhaps massive population reduction is also part off the plan you suggest but it seems a bit too speculative for me to buy in.
Semiconductors will also increase quickly as TSMC and Korean mfc like Samsung deal with supply constraints from the shut in of Qatari LNG.
Gas at $4+ coming soon. Rural drivers especially unhappy.
The big question is how long will the shutdown of the straight of Hormuz last and how soon could shipping get restarted.. The current minimum Physically is about a month to go back to February levels.
Likely it will be far longer.
1. Restarting shutin oil and gas wells is not flipping a switch. Once the political issues are resolved, add in weeks just there.
2. Ther reason this all started was politics and that is the only way it will end. Militarily the usa ability to stop missiles never existed. Shipping requires near 100% security . The usa defense against misles will only decrease as the war progresses, as missles interceptor supplies dwindle. Nuclear weapons won’t diminish the ability to fire back missiles as the launch vehicles are spread around a country the size of Alaska. Ground troops won’t be effective either, the usa can only get a few brigades into Iran. Even if more could be sent the missiles stopping shipping are spread through the country the size of Alaska.
3. Resolving political Issues takes competent diplomacy. The current protagonists in this diaster have not shown the ability to negotiate. New parties will be needed ro build confidence and trust. This will take months – at least.
Summary: prices of many things are going up. They won’t be coming down for months. This will lead to unrest in many locations.
Rural driver here. Yes. Unhappy. But also unhappy when gas prices orbited just under 5 clams a gallon under both Obama and Biden. (When they did so under W I was neither rural nor a driver). But I am also unhappy that I live under a Regime (bad governments are Regimes, right? That’s why they need changing? Like diapers.) that may have rendered a city of 17 million people uninhabitable, that mass murders children and has been the cradle of death squads and genocides my entire half-century plus of life and beyond. And one of our pothole paths (I believe they are called “roads”) just did several hundred dollars of damage to my last working automobile. “Government is a contrivance for the satisfaction of human wants” if I remember Burke correctly. A Regime is a contrivance for the frustration and pre-emption of human needs. Yet I still hear the Lee Greenwood wafting from afar.
If we have to pay at the pump, the politicians who started this war should pay at the ballot box.
“…pay at the ballot box.” Man, I’ll bet our prisons are filled with rapists and murderers who’d love an opportunity to pay for their sins at the ballot-box! Genius! That’ll stop crime for sure! Mr. Garvey the author oughta run for office on that one, ’cause it’s a winner!
It’s oft been repeated in this space, but to reiterate, we ain’t voting our way out of this mess!
“But… but… you’re not offering any solutions!”
Our history books are full of possible solutions: pick one.
A huge part of the problem is that you can vote these guts out, but then they will be replaced by Democratic politicians who will also vote to continue this war and supporting Israel.
The big problems all seem to have broad bipartisan support as both parties are funded by the same donors and are part of the same ruling class.
And unfortunately third parties are not an option.
They are not viable in the US because people won’t vote for them because they are not viable.
It would be handy to have a short video compilation of all those anti-war Trump quotes for sharing. Please tell me the Democrats have already prepared it and are running in around the clock.
I believe this is the appropriate reply: ROTFLMAO
Why would they? They aren’t against the war. They’re just mad Trump didn’t follow procedure and they feel left out.
The dems are “Plan B” if the public grows too restless, and they’ll tailor their messaging accordingly; Obama succeeds Bush II, redux. Problem solved. Again. The dem successors then carry the ball that was put into play by their repub predecessors over the finish line, and it’s again the repubs turn to be the “Plan B” that voters pine for, and so-forth.
Every. Single. Time.
These intramural competitions between parties are just fun sport to the “elites”.
The reasons why the Chartists demanded annual elections—and why it never happened—should now be clear. Four years is more than enough time for a madman to destroy America and the rest of the world.
The good news is that our impressively overpowering military does not rely on oil and petroleum fuel-stock to run.
Has congress increased the mileage allowance yet? was $ .725 , prolly a lot light In These Times.
I probably just underbid a nice little project in eastern Flyoverbumphuc.
When Trump said the American Economy would “Go through the roof”, was he standing on his head?
https://www.youtube.com/watch?v=g-4-gLlF0uw
I could post this comment on any of today’s threads so I guess I’ll append it here. Commenters keep looking for the “logic” behind some sort of “plan” that is being executed. This is just plain wrong. There is no plan.
The collapse of the American industrial economy resulted in the replacement of people who delivered actual results with a bureaucracy of sycophantic brown-nosers who merely deliver bafflegab and symbolic manipulation at never-ending meetings.
The Forever Wars have had the same effect on the U.S. military, promoting empty uniforms like McChrystal and Petraeus who could recycle bullshit for 20 years in Iraq and Afghanistan and tout their never-ending “success” while sending bright junior officers to take bullets to their heads.
Into this moral void has stepped a sociopathic madman who demands action on any random urge that erupts from the angry pustule of his addled id. The bureaucracy simply carries out his every whim, their only “duty” being self-preservation.
My conclusion is that we in the U.S. are experiencing chaos on a mythical scale. Our Billionaire Overlords seem to think that they can ride it out, but this is what the collapse of a civilization looks like. Good luck with that.
No economist here, but if no oil, gas, fetilizer out , then any petro dollars in to buy US Treasuries. How will all this trickle down to other economies ( Europe & Asia) (and then to the US)? The Gulf States have the potential to be strangled slowly and in piecemeal if no food or water being imported (desalinization plants destroyed). E.G. Baharain could easily be isolated if the casuseway connecting it to the mainland is severed. Dubai is sitting on tons of gold. Wonder who is protecting that? The Magnificent Sheiks of the US Raj. The US Navy? One other potential, is for Iran to export an ‘Islamic’ Revolution style to the Arabian Pennisula and even Egypt, etc. Remember Osama bin Laden: the leaders have lost their way and have been seduced by the glitz and glamour of the West, i.e Sunni & Shia back to spiritual beliefs and kick the minions of the Great Satan out. Trump, a true represenative of the US, has demonstrated that the US/Israel are incapable of being fair stewards with their power and that the greatest threat to the security every country on earth is the US/Israeli combo.
This guy, introduced to me by NC is scary as hell. It seems that the increase in gasoline price at the pump is the least we should be worried about:
https://theuaob.substack.com/p/the-naphtha-heart-attack-why-120
Excerpt:
The Associated Gas Domino and European Contagion
The vast majority of US LNG exports are produced as a secondary co-product of Light Tight Oil (LTO) extraction. This is a structural design: LNG export terminals were built precisely to remove excess secondary gas from the domestic market to prevent it from collapsing prices at Henry Hub.
When refineries shut their gates due to the naphtha glut and Cushing fills, LTO producers will be forced to shut-in their wells. The moment the LTO wells are shut in, the associated natural gas production stops. While WTI goes negative, US natural gas will violently spike as markets realise the Permian—source of the marginal molecule that kept Gulf Coast LNG flowing—has shut in. The domestic grid will face severe regional shortages, forcing an immediate halt to LNG exports to prioritise survival.
This failure immediately feeds back into Europe. Dependent on US LNG, Europe will face a sudden exergy vacuum. With US exports halted for domestic survival, Europe will find itself completely untethered from its primary baseload power and heating sources.
Crossing the Entropic Event Horizon
This cascade is the physical manifestation of crossing the Entropic Event Horizon (H) outlined in the SETE 2.0 framework. Because the Middle Eastern hydrocarbon infrastructure is being kinetically destroyed, there is no returning to the previous energy state. When refineries shut down and the hydrogen chokepoint hits, diesel production ceases. The global logistics network will stall.
A Warning to Policymakers
Governments must stop looking at the ticker tape. Attempting to ‘stimulate’ the economy or subsidise fuel costs in response to this $120 ghost signal will be a fatal error. Stimulus in an environment of absolute physical constraint simply burns through the last remaining biophysical buffers at an accelerating rate. We are not facing a price hike; we are facing the irreversible contraction of the physical envelope of the global economy. The inversion is imminent.
Middle East wars are a right of passage for all American presidents.
There was a woman voted off the DailyKos island who maintained her own blog for quite a while. She talked about the necessity of U.S. Presidents to be “blooded.” It’s so infuriating how the corporate press turns positive toward Trump as long as he is killing foreigners.
The term that you are looking for is ‘Presidential.’ I have heard Presidents called that by the media when they bomb some hapless nation. It’s like an earned title.