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How war in the Persian Gulf could spill into the US economy
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Smoke rises in an oil industry zone in Fujairah, United Arab Emirates, following a fire caused by debris amid the US-Israel conflict with Iran.
PHOTO: REUTERS
Lydia DePillis
- US/Israeli attacks on Iran have caused an oil price shock by disrupting oil supplies, with tankers stranded and key facilities shut down, leading to rising fuel prices.
- Trade frictions are increasing because of uncertainty caused by the war potentially delaying shipping companies' plans and clouding importers' decisions for the holiday season.
- The US faces risks from high debt, reliance on a single sector for economic growth, and a potentially overvalued stock market, increasing the risk of economic trouble.
AI generated
Three kinds of events have historically pushed the United States into recessions: financial crises, oil price shocks and pandemics.
The US and Israeli attacks on Iran have already brought about the second circumstance on that list and, if things go badly, potentially the first.
