In a surprising admission made Wednesday, former U.S. President Donald Trump acknowledged that a prolonged conflict with Iran would have pushed the United States toward a major economic collapse, warning that unchecked price spikes amid depleting emergency oil stockpiles would have devastated household and national finances.
Now, as the conflict edges toward a negotiated end and international shipping gradually resumes through the critical Strait of Hormuz, new analyses paint a grim picture: the harm inflicted on global and domestic U.S. economies is already irreversible, and elevated costs will burden consumers for years to come.
New calculations from the Institute on Taxation and Economic Policy (ITEP) quantify the immediate strain on U.S. households: the conflict has driven up gasoline and fuel costs by a cumulative $54 billion compared to a scenario where the war never began. That averages out to more than $400 in extra energy costs per American household.
Following the signing of a memorandum of understanding between the U.S. and Iran that de-escalated the conflict, Trump has moved to claim political credit for falling gas prices, which recently dropped below $4 per gallon for the first time since the conflict launched in March. Even with that decline, however, current fuel prices remain 25% higher than they were one year ago, and full recovery will be a slow process.
As The Associated Press reported Thursday, multiple structural bottlenecks will delay a return to pre-war energy pricing. Even after the Strait of Hormuz reopens to full commercial traffic, it will take weeks or months for crude oil exports to resume normal volumes. Gulf oil producers that cut production during the conflict require time to ramp operations back up, and commercial ship captains are expected to proceed cautiously before re-committing to transiting the waterway, given lingering uncertainty over whether the threat of Iranian attacks has truly passed.
Beyond crude supply delays, the logistics of fuel refining add further lag: refineries typically purchase crude oil a month or more in advance, meaning cheaper crude will not translate into cheaper fuel at the pump until existing inventory contracts work through the system. The conflict also disrupted far more than energy markets, rippling through global supply chains for fertilizer, food, and consumer goods including footwear. Businesses across sectors warn that elevated operating costs will persist, forcing consumers to absorb higher prices across a wide range of goods.
Patrick De Haan, senior petroleum analyst for fuel price tracking platform GasBuddy, told CBS News that a full return to economic normality will not happen quickly. “It will be a very long, multi-month to multi-year process for things to fully normalize,” he said, adding that gasoline prices may not return to pre-war levels until potentially the middle or end of 2027.
While consumers around the world face ongoing financial strain from the conflict’s aftermath, one group has emerged as a clear beneficiary: the global fossil fuel industry. A new analysis published Thursday by climate advocacy group 350.org found that over the course of the conflict, war-driven price hikes have delivered an additional $374 billion in excess profits to oil and gas companies, drawn directly from the pockets of households and businesses.
Using pricing projections from the International Monetary Fund, 350.org estimates that excess fossil fuel industry profits from the conflict could grow to more than $700 billion by the end of 2025, even with the Strait of Hormuz fully reopened.
“Even if the Strait of Hormuz reopens tomorrow, we should expect prices to remain above pre-crisis levels,” said Andreas Sieber, head of political strategy at 350.org. “We witness not only a massive fossil fuel crisis but a vast upward transfer of wealth built on instability of fossil fuel markets and pain.”