US and Israeli strikes on Iran could rattle oil markets
A plume of smoke rises after an explosion on February 28, 2026 in Tehran, Iran. (Photo by Majid Saeedi/Getty Images)
(NEW YORK) — The U.S. and Israel’s large-scale strikes on Iran Saturday are expected to rattle oil markets when trading resumes Sunday evening, with analysts anticipating an immediate price reaction and impact on gas prices.
The central concern isn’t just Iran’s oil production, but its influence over the Strait of Hormuz, one of the world’s most important checkpoints for oil.
According to the U.S. Energy Information Administration, roughly 20% of the world’s oil passes through the strait, making Iran’s threats to close the waterway a significant risk. The U.S. is trying to control for this situation by vowing to “annihilate” Iran’s navy.
Saudi Arabia and the United Arab Emirates have limited infrastructure in place that can bypass the Strait of Hormuz, which has the potential to mitigate any transit disruptions, but not offset them entirely.
While Iran has never followed through on these threats in the past, the perception of risk is still enough to move markets.
GasBuddy’s Patrick DeHaan expects crude oil to jump 5-10% as markets reopen, pushing oil above $70 a barrel.
While this would be much less dramatic than the response to the start of the Russia-Ukraine war in 2022, which drove prices above $100 a barrel, it would still move the average price of gas to above $3 a gallon for the first time this year.
DeHaan noted that gasoline and diesel prices in the U.S will not skyrocket overnight, and the actual impact will depend on the intensity and duration of the conflict.
Traders work on the floor of the New York Stock Exchange, March 31, 2026 in New York City. (Spencer Platt/Getty Images)
(NEW YORK) — Stocks tumbled worldwide on Thursday after President Donald Trump delivered a televised address vowing to hit Iran “extremely hard” over the coming weeks.
The Dow Jones Industrial Average fell 600 points, or 1.3%, while the S&P 500 dropped 1.2%. The tech-heavy Nasdaq declined 1.6%.
The selloff followed losses across Asian and European markets. Tokyo’s Nikkei 225 index slipped 2.3% and the pan-European STOXX 600 fell 1.3%.
Oil prices, meanwhile, surged as traders feared a persistent supply shortage amid the ongoing U.S.-Israeli war with Iran. U.S. oil prices climbed more than 10% on Thursday, registering at $112 a barrel.
Gasoline prices in the U.S. ticked up to $4.08 on average per gallon, marking a leap of $1.09 over the past month, AAA data showed.
This is a developing story. Please check back for updates.
Kevin Warsh, former governor of the US Federal Reserve, during the International Monetary Fund (IMF) and World Bank Spring meetings on Friday, April 25, 2025. (Tierney L. Cross/Bloomberg via Getty Images)
(WASHINGTON) — President Donald Trump’s selection to chair the Federal Reserve, Kevin Warsh, testified in a Senate confirmation hearing on Tuesday as his nomination faces bipartisan opposition centered on a federal criminal investigation into the central bank’s current leader.
The probe into Fed Chair Jerome Powell, which focuses on alleged false testimony to Congress about an office renovation, threatens to derail or delay Warsh’s nomination.
Powell, who was appointed by Trump in 2017, has rebuked the probe as a politically motivated effort to influence interest-rate policy.
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,” said Warsh, a former Fed official.
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.
Warsh said he welcomes collaboration with the White House and Congress on “non-monetary matters that are part of the Fed’s remit,” such as banking regulation.
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.
The investigation of Powell, Warren added, is “designed to threaten all the members of the Fed to do Trump’s bidding.”
Warsh may become Trump’s “sock puppet” atop the Fed, Warren said.
By contrast, Sen. Tim Scott, R-S.C., the chairman of the Senate Banking Committee, praised Warsh, saying the Fed nominee would focus Fed 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.
“Kevin Warsh is battle-tested and brings the necessary experience,” Scott added.
Sen. Thom Tillis, R-N.C., a potentially decisive vote on the committee, says he will not move to advance Warsh’s nomination until the Department of Justice resolves its unprecedented investigation into Powell.
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. For his part, Trump told Fox Business last week he would fire Powell if the current Fed chair attempts to remain in office past the end of his term.
Warsh, who previously worked on Wall Street and in the President George W. Bush administration, brings experience in finance and policymaking.
He is currently a fellow at a conservative think tank called the Hoover Institution, which is based at Stanford University. He also works as a partner at the Duquesne Family Office, an investment firm founded by billionaire and former hedge fund manager Stanley Druckenmiller.
In 2006, Bush appointed Warsh to serve on the Fed’s Board of Governors, a top policymaking body that helps set the level of interest rates, where he served until 2011. His tenure overlapped with the 2008 financial crisis, during which he helped manage the central bank’s response under then-Chair Ben Bernanke.
The nomination of Warsh arrives at a delicate moment for the Fed, as it grapples with a challenging combination of elevated inflation and sluggish hiring. An interest-rate hike could help ease inflation but risks a further cooldown of the labor market, while a rate cut may boost hiring but threatens higher inflation.
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.
Those remarks came before the U.S.-Israeli war with Iran, however, which sent inflation soaring last month.
The rapid acceleration of price increases could complicate interest rate policy at the Fed, which may be reluctant to lower borrowing costs as inflation climbs.
President Donald J. Trump disembarks Marine One at Valley International Airport in Harlingen, Texas Tuesday, Jan. 12, 2021, and boards Air Force One en route to Joint Base Andrews, Md. (Official White House Photo by Shealah Craighead. Via Flickr)
(NEW YORK) — An inflation report to be released on Wednesday will provide the latest measure of price increases as the U.S.-Israeli war with Iran drives up gasoline costs and renews concerns about affordability.
The fresh data — which is set to detail prices in February — will show the cost burden borne by households weeks before the outbreak of war.
Economists expect prices to have increased 2.4% in February from a year earlier, which would leave the inflation rate unchanged from January. Inflation stands slightly higher than the Federal Reserve’s target rate of 2%.
A lackluster jobs report last week showed the U.S. economy lost 92,000 jobs in February, which marked a reversal of fortunes for the labor market and erased most of the job gains recorded in 2026.
The unemployment rate ticked up from 4.3% in January to 4.4% in February, the BLS said. Unemployment remains low by historical standards.
Sluggish hiring has coincided with elevated inflation, threatening a period of “stagflation.”
Those economic headwinds helped set the conditions before the outbreak of war with Iran, which spiked oil prices and risked price increases for a host of diesel-fuel transported goods.
U.S. crude oil prices hovered at about $86 per barrel on Tuesday, surging more than 30% since a month earlier.
The average price of a gallon of gasoline in the U.S. soared to $3.53 on Tuesday from $2.92 a month prior, AAA data showed.
Still, the overall economic picture remains mixed.
A government report in February on gross domestic product (GDP) showed the economy grew at a tepid annualized pace of 1.4% over the final three months of 2025. That reading indicated a dramatic cooldown from the strong annualized growth of 4.4% recorded in the previous quarter, U.S. Commerce Department data showed.
The Iran war threatens to slow U.S. economic growth since oil-driven price increases could weigh on consumers and businesses, analysts previously told ABC News.
The potential combination of higher inflation and slower growth could also pose a challenge for the Fed, putting pressure on both sides of its dual mandate to manage prices and maintain maximum employment.
If the Fed opts to lower borrowing costs, it could spur growth but risk higher inflation. On the other hand, the choice to raise interest rates may slow price increases but risks a cooldown of economic performance.
The central bank held interest rates steady at its most recent meeting in January, ending a string of three consecutive quarter-point rate cuts. Policymakers will make their next interest-rate decision on March 18.
