Camilla Jessen
Rising tensions in the Middle East are already rippling through the American economy.
Within days of the first US-Israeli strikes on Iran, the economic impact became visible across the United States.
According to USA Today, gasoline prices had climbed by between 20 and 30 cents per gallon by March 4, adding pressure on households already watching energy costs.
Financial institutions are also watching inflation closely. Goldman Sachs estimates consumer inflation could reach 2.7 percent by May.
Jamie Dimon, chairman and CEO of JPMorgan Chase, told CNBC the situation depends largely on the length of the conflict. “If it’s not prolonged, it’s not going to be a major inflationary hit,” he said, adding: “Again, if it went on for a long time, that would be different.”
War duration concerns
The United States launched its first strikes on Iran on February 28 in an operation called “Operation Epic Fury”.
Initial expectations suggested the campaign might last four to five weeks. However, Trump has warned the fighting could extend well beyond that timeline.
The president said the US military has the capability to continue operations for longer if necessary, raising questions about how long the campaign might ultimately last.
Billions at stake
Economists say a longer war could dramatically increase the cost to the US economy.
Kent Smetters, director of the Penn Wharton Budget Model, told Fortune that the direct budgetary cost could range widely depending on how events unfold.
He estimated the lowest possible cost at about $40 billion, while a higher scenario could reach $95 billion.
The model’s central estimate places the likely cost at around $65 billion, covering military operations as well as the replacement of equipment, munitions and other supplies.
Smetters also warned that if the conflict lasts longer than two months, those figures could increase significantly.
Wider economic fallout
Beyond military spending, analysts expect broader economic disruption.
Smetters estimated the wider economic damage to the United States could total about $115 billion. According to Fortune, such losses would likely stem from disruptions to trade, energy markets and financial conditions often triggered by instability in the Middle East.
Travel has also been affected. Flights across the region have faced disruption, leaving some travelers stranded.
Travel blogger Alyssa Ramos said she is currently stuck in Kuwait, one of the countries the US State Department has urged Americans to leave.
Soldiers killed
The conflict has also resulted in American casualties.
Six US soldiers were killed after an Iranian unmanned aircraft system struck a US command center in Port Shuaiba, Kuwait, on March 1, according to CNN.
The Pentagon later identified four of the victims as Capt Cody Khork, 35, Sgt Noah Tietjens, 42, Sgt Nicole Amor, 39, and Sgt Declan Coady, 20.
Lt. Gen. Robert Harter said: “On behalf of the Army Reserve, we express our heartfelt condolences to their families and loved ones.”
“We remain steadfast in our commitment to honoring the legacy of our fallen and supporting their teammates and families during this difficult time.”
