The Israel-U.S.-Iran conflict, the world is spending money: oil price fluctuations push up prices, stock markets and consumer confidence both decline.

This article is sourced from: Times Weekly Author: Ma Huan

On March 28, the joint military action by the United States and Israel against Iran has lasted for a month.

This military conflict has shifted from a “blitzkrieg” to a “war of attrition” due to various pressures.

According to Xinhua News Agency, U.S. President Trump tweeted on the afternoon of March 26 local time that, “at the request of the Iranian government,” he would delay the “destruction” of Iran’s energy facilities by 10 days, extending the deadline to 8 p.m. Eastern Time on April 6 (8 a.m. Beijing Time on April 7).

Although Trump claimed that relevant negotiations were progressing “smoothly,” the U.S. and Israel did not halt their military actions against Iran.

Source of the image: The White House

According to CCTV News, in the early hours of March 28, multiple areas in Tehran, the capital of Iran, were subjected to heavy bombing in several rounds. Based on observations from the reporter stationed in Tehran over the past few days, this U.S.-Israeli attack on Tehran is the largest scale in recent times.

Iran also responded decisively, attacking U.S. military bases within Saudi Arabia. CCTV News cited a March 27 report from The Wall Street Journal, revealing that informed officials from the U.S. and Saudi Arabia disclosed that Iran attacked the Prince Sultan Air Base, where U.S. troops are stationed, resulting in injuries to U.S. personnel and damage to several U.S. air refueling aircraft.

Clearly, there are no signs of de-escalation in military actions from all sides, and a quick ceasefire and negotiations seem unlikely in the short term.

The costs incurred by the United States are evident. According to CCTV News, during the first six days of the U.S.'s large-scale military operations against Iran, the U.S. military expenditure exceeded 10 billion dollars, with future budgets projected to surpass 200 billion dollars.

And this is only the U.S. side’s losses; the impact of the war has also heavily affected the global economy.

In the past month alone, about one-fifth of the world’s crude oil and liquefied natural gas transportation has been disrupted, with Brent crude oil prices soaring well above pre-conflict levels. On March 27 local time, Brent crude futures rose by up to 5%, closing at $106.29 per barrel. WTI crude oil also surged over 7.5% intraday, closing at $101.18 per barrel, once again crossing the $100 mark.

This energy shock has propagated worldwide, leading to inflation increases and slowing economic growth in many countries or regions, and even raising the risk of stagflation.

The U.S.-Iran-Israel conflict is making the entire world pay the price.

U.S.: 30% Chance of Recession

When the U.S. launched the Iraq War in 2003, American taxpayers paid a hefty price of about 3 trillion dollars, equivalent to $8,500 per citizen. Now that the U.S. has joined the military operations against Iran, how much will American taxpayers have to pay?

According to CCTV News, a report from the U.S. Department of Defense indicates that during the first six days of the large-scale military actions against Iran, U.S. military spending exceeded $11.3 billion, nearly enough to build a Ford-class aircraft carrier.

Moreover, this figure does not include some related expenses, such as troop deployments and equipment replacements. Therefore, the actual costs for the U.S. may be even higher.

Source of the image: The White House

Furthermore, the Pentagon has requested the White House to approve a funding package exceeding $200 billion for upcoming military operations against Iran.

The bills from this conflict are not only to be paid by the U.S. government; American citizens are also bearing the costs.

As of March 25, according to the latest data from the American Automobile Association (AAA), the average gasoline price across the U.S. reached $3.98 per gallon, up about 35% from a month earlier, while diesel prices broke through $5.345 per gallon, soaring over 40% in a month.

55% of respondents said that rising fuel prices have affected their household finances, with 21% indicating a significant impact, and 87% of Americans expect fuel prices to continue rising over the next month.

The surge in oil prices has increased living costs for the public, with consumer confidence taking the hardest hit. On March 27, data from the University of Michigan showed that the March consumer sentiment index fell to 53.3, down from 57.3 in February, the lowest since December last year.

Oren Klachkin, chief economist at Nationwide Financial Markets, said: “We expect that weakening consumer confidence will be compounded by declining real purchasing power and a weakening wealth effect, further slowing consumption growth in the second quarter.”

Americans’ pessimism about the economic outlook is also reflected in the stock market, with the S&P 500 Index and Nasdaq Composite Index both falling to their lowest levels in over six months.

On March 27, local time, the three major U.S. stock indices all declined, with the Nasdaq down 2.15%, losing 3.23% for the week; the S&P 500 fell 1.67%, down 2.12% for the week; and the Dow Jones Industrial Average dropped 1.72%, down 0.9% for the week, marking the fifth consecutive week of declines.

Wall Street economists have collectively lowered their growth forecasts for the U.S. economy in 2026, while raising estimates for inflation and unemployment, and increasing the probability of a recession.

Goldman Sachs, in its latest report, predicts that due to the Iran situation, the U.S. unemployment rate is expected to rise from the current 4.4% to 4.6% by the end of 2026, and the likelihood of the U.S. economy entering a recession within the next year has increased to 30%.

Global Economy: Recovery Difficult This Year

Not only the U.S., Israel, and Iran, but the entire world is sharing this burden.

The most immediate impact is on energy infrastructure damaged by the conflict. Destroying energy infrastructure takes only minutes, but rebuilding it can take months or even years.

In Qatar, the LNG export facilities damaged by Iranian missile strikes are expected to take three to five years to repair, with an estimated loss of about 12.8 million tons of export capacity annually, resulting in an estimated annual revenue loss of around 20 billion dollars. This means that even if a ceasefire is declared now, the supply gap will be difficult to fill in the short term.

This is only the current damage. According to CCTV News, mediators indicate that the probability of reaching a ceasefire remains slim, as both Iran and the U.S. have put forward extreme demands that the other side cannot accept.

As long as the U.S.-Israeli-Iran conflict continues for even one more day, the damage to energy facilities will multiply exponentially.

                    Source of the image: Tuchong Creative

And these losses will be borne collectively by the world.

According to economic stress testing models from relevant organizations, if the U.S.-Israel-Iran military conflict results in the Strait of Hormuz being closed for three months, international oil prices could spike to $170 per barrel, posing severe stagflation risks for major global economies.

Fluctuations in oil prices will push up prices worldwide; analysts estimate that inflation peaks in the EU and the UK could rise sharply by 2.0% and 1.9%, respectively, with GDP contracting by -1.2% and -1.1% this year. Currently, the European Central Bank has also expressed a more pessimistic outlook for the Eurozone economy.

“If oil prices stay at $100 per barrel, the most immediate impact will be a reduction in consumer spending,” said Bernard Yaros, chief economist at Oxford Economics. “Low-income consumers worldwide will bear the heaviest burden, as energy costs constitute a large part of their monthly expenses.”

Greg Daco, chief economist at EY-Parthenon, said that in the worst-case scenario, oil prices could remain above $100 per barrel, leading to higher prices for goods and slowing global growth. He estimates that prolonged conflict could raise global inflation by about 2 percentage points above normal levels.

Citigroup analysts believe that if broader market turmoil persists, countries with low foreign exchange reserves such as Argentina, Sri Lanka, and Turkey will face higher risks of capital outflows and currency devaluation.

In Asia, experts from the Japan Life Basic Research Institute predict that if the war reaches a stalemate, Japan’s actual economic growth could decline by 0.31 percentage points. This would further worsen Japan’s already inflation-pressured economy. The OECD (Organization for Economic Cooperation and Development) has revised South Korea’s economic growth forecast for this year downward to 1.7%, a reduction of 0.4%.

On March 27, the OECD forecasted that global economic growth will slow from 3.3% last year to 2.9% in 2026.

The OECD stated that this month’s Middle East conflict has wiped out the opportunity for upward revisions to global growth this year and has introduced higher inflation risks.

At the start of 2026, before this war erupted, the global economy was actually on a stronger trajectory than previously forecast. At that time, estimates suggested global growth could be revised upward by about 0.3 percentage points. But now, these opportunities have been destroyed by the impact of the conflict.

“Even if the fighting ends tomorrow, oil prices will not return to previous levels overnight,” said economist Nouriel Roubini.