Oil and gas prices surge as Iran escalates strikes on Gulf refineries

(NEW YORK) — The U.S. recorded strong job gains in March, rebounding from dismal losses a month earlier, even as the nation weathered a global oil shock set off by the U.S.-Israeli war on Iran, a jobs report on Friday showed. The reading far exceeded economists’ expectations.

The U.S. added 178,000 jobs in March, according to the report, which marked a sharp increase from 133,000 jobs lost in the previous month.

The unemployment rate ticked down to 4.3% in March from 4.4% in February, the Bureau of Labor Statistics (BLS) said. Unemployment remains low by historical standards.

As in previous months, the health care sector stood out as a top source of hiring in March, adding 76,000 jobs, the BLS said. The construction sector, as well as transportation and logistics, also contributed to the surge in hiring.

Employment in the federal government continued to decline in March, shedding 18,000 jobs, the BLS said. The federal government has lost 355,000 jobs, or nearly 12% of its workforce, since October 2024, a month before President Donald Trump took office.

The government data arrived as the war continues to drive up gasoline prices and borrowing costs, threatening a drag on the economy.

The U.S. added an average of about 15,000 jobs per month in 2025, U.S. Bureau of Labor Statistics (BLS) data showed. That performance amounted to a sharp slowdown from 186,000 jobs added each month in 2024.

The U.S.-Israeli war on Iran, which began on Feb. 28, triggered one of the worst global oil shocks in decades, prompting gloomy forecasts on Wall Street of a potential U.S. recession over the coming months.

In theory, a prolonged oil shortage could drive up prices for a vast array of goods, sapping energy from consumer spending, which powers most of the nation’s economic growth.

Iran has mounted an effective closure of the Strait of Hormuz, a critical maritime trading route that facilitates the transport of about one-fifth of the global oil supply.

The U.S. is a net exporter of petroleum, meaning the country produces more oil than it consumes. But since oil prices are set on a global market, U.S. prices move in response to swings in worldwide supply and demand.

The disruption in oil shipping has pushed U.S. crude prices above $110 a barrel, which marks a staggering rise of more than 50% since the war began on Feb. 28.

Gasoline prices in the U.S. ticked up to $4.08 on average per gallon as of Wednesday, marking a leap of $1.09 over the past month, AAA data showed.

A potential jump in costs for additional goods delivered through the Strait of Hormuz — such as fertilizer and diesel fuel — could also raise prices beyond gasoline, putting pressure on the Federal Reserve to hike interest rates in an effort to quell possible inflation.

The benchmark interest rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.

If the Fed moved to raise interest rates, it would hike borrowing costs for many consumer and business loans, risking a slowdown in hiring.

Speaking at Harvard University on Monday, Fed Chair Jerome Powell said the central bank could take a patient approach as it monitors potential price effects from the Middle East conflict.

“We feel like our policy is in a good place for us to wait and see how that turns out,” Powell said.

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(NEW YORK) — A threat of U.S. attacks on power plants in Iran continues to loom over the Middle East conflict, even after Trump pushed back a self-imposed deadline for the second time.

In a post on social media on Thursday, Trump said he was “pausing the period of Energy Plant destruction” until April 6.

In the event of such an attack, Iran has said it would carry out tit-for-tat strikes against energy infrastructure in neighboring countries, according to Iran’s Fars News Agency state media.

The threatened escalation risks a humanitarian crisis for tens of millions of people in the region, potentially restricting their access to basic essentials such as electricity, food, water and health care, some analysts told ABC News.

Distress could spread to countries beyond the Gulf if dire conditions prompt residents to flee across borders and infrastructure damage worsens a global oil shock, analysts said.

“This will be bad for everybody,” Mushfiq Mobarak, a professor of economics at Yale University, told ABC News. “The most damaging effects — the largest welfare costs — will be on Iranian civilians.”

On March 21, Trump vowed to “obliterate” power plants in Iran within 48 hours unless the country eases its blockade of the Strait of Hormuz. Before the deadline arrived on Monday night in Washington, D.C., Trump posted on social media that he was postponing the ultimatum for five days, claiming “productive conversations” had been held between the U.S. and Iran.

On Thursday — one day before the new deadline was set to arrive — Trump said he would postpone the deadline for an additional 10 days.

Negotiations between the U.S. and Iran are “ongoing,” Trump claimed. Iranian officials have denied that the country is in talks with the U.S.

Meanwhile, Iran has pledged to retaliate against civilian infrastructure in nearby countries in response to an attack on its energy sites.

“Immediately after the power plants and infrastructure in our country are targeted, the critical infrastructure, energy infrastructure, and oil facilities throughout the region will be considered legitimate targets,” Iranian parliament speaker Mohammad Bagher Qalibaf said in a post on X on Sunday.

Natural gas supplies roughly 79% of electricity used in Iran, according to the International Energy Administration, a global energy policy group based in Paris, France.

The majority of the nation’s natural gas is supplied by South Pars, the largest natural gas field in the world. An Israeli attack on South Pars last week threatened severe impact in Iran and neighboring Gulf states, analysts previously told ABC News.

Potential U.S. attacks on energy infrastructure could cut off electricity access for many of the 92 million people in Iran, while at the same time discontinuing power for critical institutions like hospitals, Mobarak said.

“If hospitals lose power, that’s very dangerous,” Mobarak said.

The health care impact would come as some hospitals in the region face perilous conditions, according to the World Health Organization (WHO). Health care facilities faced a total of 13 attacks as of March 5, the WHO said, voicing concern about “health systems and lives at risk in the region.”

Attacks on civilian infrastructure in Iran could also worsen food shortages and price increases, Michael Werz, a senior fellow at the Council on Foreign Relations, told ABC News. Annual food inflation in Iran stood at 72% in December, before the war began, The Wall Street Journal reported.

Any further deterioration of food access, Werz said, could have a “massive impact.”

Potential Iranian retaliation against civilian sites threatens desperate conditions for millions of people in nearby countries Oman, Qatar, Kuwait, Saudi Arabia, the United Arab Emirates (UAE), Iraq and Israel, some analysts said.

Those countries depend in large part on water desalination plants for drinking water due to arid conditions in the region, making those facilities a major potential vulnerability, Ginger Matchett, assistant director with the GeoStrategy Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security, said in a blog post.

Desalinated drinking water accounts for at least 90% of the supply in Kuwait, Bahrain and Qatar, while Israel and Oman each depend on such plants for 80% of their drinking water, Matchett said.

“If Iran successfully destroyed the Gulf’s desalination infrastructure, then the consequences could be devastating,” Matchett added.

In early March, desalination plants in Iran and Bahrain were targeted in the fighting, and missile-related damage has also been reported at sites in Kuwait and the UAE.

Potential retaliatory attacks on oil and gas sites in the region also threaten to deepen and prolong a global oil crisis, driving up fuel costs and raising prices for essential goods worldwide, some analysts said.

Global oil prices skyrocketed in recent weeks after the war prompted closure of the Strait of Hormuz, a critical waterway for global oil and natural gas delivery. Consumers have held out hope for a reopening of the strait and a relatively speedy recovery, but facility repairs could stretch on for months and choke off fuel supply in the meantime.

Qatari authorities said last week that Iranian ballistic missile attacks caused fires and “extensive damage” at the Ras Laffan terminal, which carries about one-fifth of the global supply of liquid natural gas. An Iranian missile attack struck oil refineries last week in Haifa, Israel, where fire brigades extinguished a fire that broke out at the site, Israel Fire and Rescue said.

The Philippines has declared a national energy emergency in response to the U.S.-Israeli war with Iran, while South Korea has called on residents to ride bicycles for short trips and reduce the length of showers. Thailand and Vietnam have also asked citizens to take steps to curtail energy use.

Roughly 80% of the oil that typically passes through the strait is bound for Asian markets, according to the IEA. Still, the oil shock will raise gas prices worldwide, since energy is sold on a global market, Mobarak said.

“This will have effects for gas consumers across the world,” he added.

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(WASHINGTON) — A Senate committee on Wednesday voted to advance Fed chair nominee Kevin Warsh, clearing a key hurdle in his path to replace Fed Chair Jerome Powell before his term ends next month. Warsh’s nomination will move to a confirmation vote on the floor of the upper chamber.

The Senate Banking Committee voted 13-11 to approve the nomination on a party-line vote, with Republicans supporting the nomination and Democrats opposing it.

The vote comes days after the Department of Justice moved to drop its criminal probe into Powell. Before that, Warsh had faced a bipartisan stonewall in the Senate Banking Committee over the probe.

Sen. Thom Tillis, R-N.C., who previously vowed to oppose Warsh’s nomination on account of the investigation, said he would flip his vote after the investigation was set aside. Tillis voted to approve the nomination on Wednesday.

The probe into Powell focuses on alleged false testimony to Congress about an office renovation. Powell, who was appointed by Trump in 2017, has rebuked the investigation as a politically motivated effort to influence interest-rate policy.

Powell’s term as Fed chair ends on May 15, but he said last month he would stay in the position until Warsh is confirmed.

Warsh, a former Fed official, is currently a fellow at a conservative think tank called the Hoover Institution, which is based at Stanford University.

At testimony before the Senate Banking Committee last week, Democrats sharply criticized Warsh, saying the independence of the Fed would be at risk if Warsh were to take policy cues from Trump.

In his opening remarks, Warsh voiced support for the independence of the Fed in its role setting interest rates. He used the term “monetary policy” to describe the central bank’s task of adjusting benchmark borrowing costs.

“Monetary policy independence is essential. Monetary policymakers must act in the nation’s interest,” Warsh said.

Still, Warsh defended the right of public officials, including presidents, to voice their views on interest-rate policy, saying such comments do not infringe on Fed independence.

“Central bankers must be strong enough to listen to a diversity of views from all corners,” Warsh said.

Sen. Elizabeth Warren, D-Mass., the top Democrat on the committee, responded directly to Warsh’s defense of a president’s right to criticize the Fed, saying the federal investigation of Powell amounts to a pressure campaign that extends beyond public criticism of Fed policies.

“You said it’s perfectly fine for elected officials to state their views on interest rates. But that’s not what Donald Trump is doing,” Warren said, addressing Warsh.

Republicans, including Sen. Tim Scott, R-S.C., the chairman of the Senate Banking Committee, praised Warsh, saying the Fed nominee would focus central bank policy on economic stewardship. During the tenure of President Joe Biden, Scott claimed, the Fed shifted some of its attention to the implications of issues like climate change.

“An independent Federal Reserve is essential to achieving its mission. That independence must be protected,” Scott said.

During his term as a Fed governor in the late 2000s and early 2010s, Warsh gained a reputation as an interest-rate “hawk,” meaning he generally preferred higher interest rates as a means of ensuring low and stable inflation.

In recent months, however, Warsh has voiced support for lower interest rates, rebuking the Fed’s concern about inflation risk posed by a flurry of new tariffs issued last year.

The Senate committee vote came hours before the Fed is set to announce its latest decision on the level of interest rates. The central bank is widely expected to hold interest rates steady.

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