The economic fallout from President Donald Trump’s war in Iran may last for years, economists have warned.
While the president and members of his administration have promised a quick recovery, industry analysts say there are damaging ripple effects after the closure of the strategically important Strait of Hormuz in the Persian Gulf sent gas and oil prices soaring. The numbers also continue to rankle the president, who has floated hitting Iran even harder, potentially deepening the crisis.
“Tuesday will be Power Plant Day, and Bridge Day, all wrapped up in one, in Iran. There will be nothing like it!!!” he posted on Truth Social on Sunday, threatening to decimate more Iranian infrastructure.
“Open the F----n’ Strait, you crazy b-----ds, or you’ll be living in Hell - JUST WATCH!” he continued, adding, “Praise be to Allah.”
This firebrand rhetoric contradicts messaging from the Trump camp that indicates that an end to the war could be close. His threats could consign pre-war prices to the past, according to Mark Zandi, chief economist at Moody’s Analytics.
He told Politico: “I don’t think we’re going back to the pre-war prices for the foreseeable future. Certainly won’t be this year, won’t even be next year. Might not be ever.”
Oil prices have fluctuated wildly with Trump’s mixed messaging. After his Truth Social post, Brent crude rose above $110 a barrel before easing after a report of talks on a potential ceasefire.
Oil analyst Rory Johnston has warned that the strain of fuel shortages is now starting to show. “Diesel price and gasoline prices are already being affected by that sucking, insatiable appetite for any barrel they get their hands on in Asia,” Johnston said.
Transportation, the food industry, farming, shipping and other industries will feel the squeeze soon, he warned.
Mortgage rates have shot up after a period of cooling, too.
“We ended 2025 sort of like, okay, let’s get that behind us—really optimistic about the 2026 housing market. I would even characterize it as ‘giddy optimistic’ when rates dipped below 6 percent in February,” said Lisa Sturtevant, chief economist at Bright MLS.
“Farmers were optimistic that things were turning the corner this year,” said John Newton, vice president of public policy and economic analysis at the American Farm Bureau Federation. However, the closure of the Strait has hampered the industry, causing the price of everyday needs to rise.
“And then the Strait of Hormuz closes,” Newton said. “Urea prices have skyrocketed. Diesel prices have gone up dramatically. They were already difficult to pencil break even, and then this made it more difficult.”
Ricky Volpe, a USDA economist turned professor of agribusiness at California Polytechnic State University, delivered the most stark warning. “We’re already past the point of no return,” he said. “The question is, how pronounced will it be and how long will it last?”
White House spokesman Kush Desai said in a statement that the sting will be short-term. “As the administration’s proven economic agenda of tax cuts, deregulation, and energy dominance continues taking effect, and as new trade deals and trillions in investments continue materializing, Americans can rest assured that growth is set to keep accelerating when the objectives of Operation Epic Fury are achieved,” he said.
