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WASHINGTON (AP) — The war with Iran is doing collateral damage to the world economy.
The conflict is driving up energy and fertilizer prices; threatening food shortages in poor countries; destabilizing fragile states such as Pakistan; and complicating options for the inflation fighters at central banks like the Federal Reserve.
Causing much of the pain: the Strait of Hormuz — through which a fifth of world’s oil passes — was effectively shut down after the U.S. and Israel launched missile strikes Feb. 28 that killed Iranian leader Ayatollah Ali Khamenei.
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A sign displays fuel prices a BP gas station in Elizabeth, New Jersey on March 9, 2026. President Donald Trump said he would waive oil-related sanctions, have the U.S. Navy escort tankers through the Strait of Hormuz and predicted on Monday that the war with Iran would resolve "very soon" as he confronted mounting economic and political pressure and days of dramatic fluctuations in oil markets. Bing Guan/Bloomberg via Getty Images
“For a long time, the nightmare scenario that deterred the U.S. from even thinking about an attack on Iran and which got them to urge restraint on Israel was that the Iranians w
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