Market Update: 4 takeaways on the economic consequences of the Iran war – Full Analysis

by Clark Merrefield, The Journalist’s Resource
March 20, 2026

U.S. and Israeli attacks in Iran have reportedly killed more than 1,300 people since the war there began late last month. Missile and drone strikes have destroyed or closed significant energy infrastructure across the Middle East. The effective closing of the Strait of Hormuz — 20% of the world’s oil supply passes through it — has meant rising energy prices for U.S. and other consumers.

“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” according to a recent report from the International Energy Agency.

On March 16, as the war entered its third week, The Journalist’s Resource and EconoFact convened a panel to discuss the ongoing economic consequences of the Iran war. I moderated the discussion with:

• Binyamin Applebaum, lead writer on economics and business for the New York Times editorial board.
• Nicholas Bloom, the William D. Eberle Professor of Economics at Stanford University.
• Michael Klein, the William L. Clayton Professor of International Economic Affairs at Tufts University and Executive Editor of EconoFact.
• David G. Victor, distinguished professor of innovation and public policy at the University of California San Diego.

Our wide-ranging conversation touched on economic uncertainty, windfalls for oil producers, how business leaders may be communicating with the administration of President Donald Trump, and even artificial intelligence — insights that local reporters and independent journalists can adapt for their audiences.

Here’s one story idea: Whether business uncertainty spurred by the war is slowing hiring within your coverage area. Watch the video and keep reading for takeaways from our discussion.

The war could increase uncertainty in U.S. hiring

The early days of the COVID pandemic in the U.S. were marked by the Great Resignation — workers leaving their jobs at high rates for a range of reasons, from low pay to a lack of advancement opportunities to feeling disrespected at work.

Now, business uncertainty is fueling the opposite — the Great Hesitation, some are calling it — marked by slow hiring processes and high standards for job candidates. The reason, Bloom explained, is that when businesses are uncertain about the future they’re hesitant to invest the time and money it takes to hire someone, unless they think a candidate is a perfect fit.

Still, the labor data isn’t all doom and gloom, Bloom said. For example, the unemployment rate remains historically low at 4.4%.

But job growth is also low, in part because of immigration crackdowns. And adding more uncertainty to that equation isn’t going to help hiring prospects for those on the job market.

“What will the event in Iran do? I think it’s going to make that worse,” Bloom said.

With energy prices rising due to the war, short-term inflation expectations are also up, as Federal Reserve Chair Jerome Powell explained during remarks on March 18.

Interest rates tend to follow inflation, Klein said during the webinar. As the cost of borrowing increases, businesses turn reluctant to invest and expand their workforces.

“Financial conditions probably will deteriorate, would be my guess, based on what’s going on right now,” Klein said.

Oil producers are seeing windfalls

With Brent crude trading at triple-digits per barrel and U.S. gas prices nearing an average of $4 per gallon, oil producers have reaped historic market valuations since the start of the Iran war.

“You’ve seen, just in the last few days, reporting on the incredible increase in valuation of essentially all the Western oil companies,” Victor said. “Anyone who’s not too tethered to getting their product out of the Gulf — and that includes Texas. So there’s going to be a huge windfall.”

Other oil producing countries — including those unfriendly to U.S. interests — also stand to benefit from the choking off of oil shipping through the Strait of Hormuz.

“Russia is going to be a big beneficiary of this,” Klein said. “Not only because of the increase in the price of oil but the relaxation of sanctions on Russian oil.”

If business leaders are discontent over the war, they’re communicating it behind the scenes

It might seem that the oil industry would be, if not thrilled about the war, then perhaps content, considering that the price of their product has significantly risen.

But oil companies think long-run, Victor said. They’re concerned with political support for the industry across multiple administrations, along with public backlash.

The same is true of companies across many industries. When companies communicate concerns with this administration in particular, they tend to tread lightly, Applebaum explained.   

“I’ve spent a fair amount of time talking to business leaders about their interactions with the Trump administration, and the overarching theme that you hear repeatedly is that what they learned during the first Trump administration is that there is almost zero value, and indeed significant negative value, in confronting the president or in criticizing him publicly,” Applebaum said.

Instead, he said, when business leaders have issues with administration policies or actions, they tend not to communicate those publicly, but rather behind the scenes through intermediaries.

“That is why you are not seeing corporate executives talking about this in public,” Applebaum said.

The war could slow economic growth from AI

Infrastructure and software behind the artificial intelligence boom are helping spur economic growth in the U.S., according to a recent analysis from the Federal Reserve Bank of St. Louis. AI data centers that require huge computing power are a major part of AI-related infrastructure growth.

The energy needs of AI data centers are well documented. An AI data center may consume as much electricity as 100,000 households, according to the International Energy Agency.

“If energy prices go up there’s more political pressure to push back on AI and its energy use, and that could be another big issue for U.S. growth,” Bloom said. “That I could see coming reasonably soon.”

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