What are the economic impacts of the war in Iran?

The economic impacts of the Iran war and Iran’s closure of the Strait of Hormuz already reach around the world, according to an expert.

Iran’s blockade of the strait, a narrow waterway through which ordinarily passes about a fifth of the globe’s oil and natural gas supplies, already has historic consequences for consumers, says David Bieri, a Virginia Tech economic expert.

“Global crude prices spiked to nearly $120 a barrel about a week after the war began before easing to around $100, which is still up more than 40 percent from the pre-war level of $70,” he says.

“Gasoline prices are averaging close to $4 per gallon, up nearly 80 cents from a month ago, and diesel is just under $5 a gallon—just over $1.30 higher than last month.”

Bieri emphasizes that the impacts resonate more widely than prices at the pump.

Here, he answers questions on the topic and expands on those impacts:

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