The United States has significantly reduced Iran’s oil exports through a blockade, impacting Iran’s economy and loosening its control over the Strait of Hormuz. Despite these efforts, the conflict initiated by the U.S. and Israel in February remains unresolved, with ongoing low-level fighting and no diplomatic progress since a failed agreement in June. The economic pressure on Iran has not led to an uprising, and Iran may choose military escalation if cornered. Meanwhile, Iran’s Houthi allies in Yemen have increased attacks on Saudi Arabia, contributing to rising oil prices. Brent crude has surged above $100 per barrel, and diesel prices have hit a record high, potentially fueling inflation. U.S. President Donald Trump has acknowledged that high gas prices may persist through the midterm elections. Middle East expert Mona Yacoubian notes that the U.S. is not winning the conflict, as Iran shows no signs of backing down and is willing to escalate the situation.
QUESTION: How might the ongoing conflict between the U.S. and Iran impact global oil prices and the economy in the long term?
U.S. makes progress in reopening the Strait of Hormuz, but the Iran war is far from over
