The U.S. economic outlook is growing bleaker two weeks into the Trump administration’s military operation against Iran, two energy experts warned Saturday, and has already cemented a “higher floor on pricing” for various goods for the indefinite future.
“Compared to a week ago, the situation looks more challenging and longer lasting,” said Dan Pickering, an oil forecaster and founder of Pickering Energy Partners, speaking with Fortune in its report Saturday.
“An easy solution to the straits does not appear on the horizon. With that, there’s fear of inflation, fear that stocks might be overvalued, and you’re hearing ‘stagflation’ a lot. It’s rippling through sentiment, and it’s putting a higher floor on pricing whenever this conflict ends.”
President Donald Trump authorized unprecedented attacks on Feb. 28, and in the weeks since, oil prices have surged to levels not seen since Russia’s 2022 invasion of Ukraine. At the center of rising oil prices is Iran’s closure of the Strait of Hormuz, a major shipping route through which 20% of the world’s oil trade passes.
The skyrocketing energy prices have reportedly sparked panic within the Trump administration, with one of Trump’s top aides now urging Trump to seek an “off-ramp” to “get out” of the conflict.
For energy expert Bob McNally, however, who previously served as President George W. Bush’s energy adviser, Trump had already passed the point of no return to halt rising costs.
“The world can’t grow without 20% of its energy – not in the short term,” McNally told Fortune in its report Saturday. “People are just unwilling to come to grips with the idea that we’re not going to get 20% of our energy back really fast.”