The U.S. involvement in the Iranian war has a lot of Americans confused about what started the conflict. President Trump has stated that the war started over nuclear weapons, with none discovered yet. Almost 50 days into the war, the notable things Trump and Israel have done are bomb an all-girls school and force Iran’s hand, resulting in them closing the Strait of Hormuz, a central oil port for the world.
Iran first closed the Strait, through which 20 percent of the world’s oil flows, along with fertilizers, aluminum, and some consumer goods, on March 4, severely restricting the passage of commercial shipping vessels.
The US, in response to Iran’s closing of Hormuz, began a naval blockade on April 13. Four days later, Iran reopened the port for 24 hours, then closed it again, ordering the US to end their blockade, or they will keep the port closed. Trump responded to Iran on Truth Social, “Open the strait, you crazy bastards, or you’ll be living in hell,” wrote the President, threatening to eviscerate Iran’s power plants and bridges if the country’s leadership did not capitulate.
More than 10,000 soldiers are involved in the blockade that analysts believe could cost Iran over $400 million daily. The move was part of a broader U.S. economic pressure campaign aimed at forcing Iran to open the Strait of Hormuz and make a deal to end the war.
The White House’s budget director told lawmakers on Capitol Hill that he doesn’t have a “ballpark” on how much it will cost the United States to fund the war in Iran.
“We’re not ready to come to you with a request. We’re still working on it,” White House budget director Russell Vought told lawmakers during a House of Representatives Budget Committee hearing. Trump currently has a request for a $1.5 trillion budget for the war.
The longer this standoff goes, many countries are going to continue feeling the harmful impacts, which may be irreversible, according to political experts. “Even if oil prices decline now, some of the damage to the poorest countries in the world and to the most vulnerable populations in the world has already been done. We may not be able to undo it quickly,” said Dr. Anil Deolalikar, professor of economics at UC Riverside, at a briefing.
While the rising gas prices have been felt collectively, farmers are also impacted as fertilizer prices have increased by almost 30 percent amid the shortage. “As farmers cut back throughout the world on planting, we will see a delayed impact on food crop harvests later on in the year as the agricultural cycle moves on,” said Deolalikar, noting that the impact would hit hardest in countries already facing food insecurity.
For millions of small farmers, particularly in developing economies, the consequences are existential. “Many of them live literally from paycheck to paycheck,” Deolalikar said. “Their finances depend quite a bit on stable input prices, and this has really increased the debt load on farmers,” he said, predicting there would be more farmer suicides in the year ahead.
For consumers, the effects are already visible. “When oil prices go up, gas prices go up. But more broadly, you see inflation: prices will rise while economic activity declines,” Ryan Nunn, director of research at the Budget Lab at Yale, explained. “Lower-income households are hit harder by price increases since they tend to spend a greater portion of their budgets on goods, have fewer options to trade down to cheaper alternatives, and have little to no savings to absorb the shock,” he explained.