As the war with Iran continues, some economists and business leaders are concerned it could kick-start a recession.

Iran has been targeting sites with economic repercussions across the Middle East: Oil tankers off the coast of Oman, Dubai and Kuwait airports, and, most importantly, threatening to block the Strait of Hormuz.

“A prolonged closure of the Strait of Hormuz is a guaranteed global recession,” Bob McNally, founder of consultancy group Rapidan Energy, told CNBC. The U.S. has already experienced a rise in gasoline prices and a topsy-turvy stock market.

Other economists, like Mark Zandi at Moody’s Analytics, said disruption of oil supplies for two weeks is not a big deal, but anything longer than a month or two could do a lot of damage.

Besides just oil, Persian Gulf nations have been major investors in the U.S. economy. Some business leaders in the Gulf have criticized the Trump administration for dragging the region into conflict. How much the war affects U.S. investment remains to be seen.

Question: Are recession fears over war in Iran overblown?

Economists

Caroline Freund, UC San Diego School of Global Policy and Strategy

NO: The combination of persistent uncertainty and rising oil prices could push the U.S. into recession. Much depends on how long the war lasts and how far oil prices rise. Hiring has already slowed, with net job losses in February. When firms face uncertainty about energy prices, tariffs and rapidly changing technology, they delay hiring and investment. The longer businesses wait on the sidelines, the greater the risk that a slowdown turns into recession.

James Hamilton, UC San Diego

NO: Twenty million barrels of oil pass through the Strait of Hormuz each day. That’s almost a quarter of total world field production of crude oil. If that flow were to be disrupted for a significant period it would be a major blow to the world economy. Moreover, the U.S. labor market was already showing some worrisome signs of slowing before the bombing began. The question is how soon oil can get back to moving through the Persian Gulf.

Norm Miller, University of San Diego

NO: A brief war (less than two months) wouldn’t trigger a recession, but a longer conflict and constrained oil supply would raise fuel, transport and consumer goods costs. Combined with weakening job data, new tariffs and softer retail spending, the GDP will face downward pressure. AI, data center and autonomous‑vehicle investments are providing some offset. Yet, if stock markets are a six‑month or more leading indicator, post-war stock price declines already signal a modest recession or flat GDP in early 2027.

Kelly Cunningham, San Diego Institute for Economic Research

NO: Prolonged exposure to the conflict would increase the severity of the disruption. Market interruptions raise concerns over commodity-price shocks and inflation, but the impact can be minimized if duration of the conflict is limited and regional stability and commerce are quickly restored. State-sponsored Iranian terrorism harmed more than American and Israeli interests, encompassing the Gulf’s regional impact on global operations. If relatively short then the impact should not be significant and operations afterward should actually be improved.

Alan Gin, University of San Diego

NO: Oil is up over $30 a barrel compared to the lows of mid-February, which translates into an increase of $0.75 per gallon of gas. And the price could go higher. That means reduced buying power in the economy as people spend more on gas. They will also have to spend more on products that are shipped. This could lead to job losses as consumers have to tighten their belts. The inflationary impact may also restrict the Federal Reserve in terms of cutting interest rates.

David Ely, San Diego State University

NO: As has been widely noted by analysts, the likelihood of a recession chiefly depends on the length of time oil supplies remain disrupted. But the likelihood of a downturn, both in the U.S. and globally, has certainly increased. It would be prudent for businesses to form contingency plans for a stagflation scenario given the real possibility that the disruptions to oil supplies are not short-lived and that the elevated oil prices are not transitory.

Ray Major, economist

NO: Fears of a recession are not overblown primarily because there are too many unknowns regarding when the economic disruption caused by the war will end. If the Strait of Hormuz is closed for more than a few weeks, one could foresee enough disruption that we slip into a mild recession. However, if shipping of oil and other critical products resumes in short order, we should not see a significant negative effect on the national economy.

Executives

Gary London, London Moeder Advisors

YES: Iran has apparently selected the ayatollah nepo son hardliner as successor. This suggests that Iran is digging in, threatening extended war, which will more severely impact our economy. Most of the major indicators, including employment, oil prices, inflation and GDP are trending negative. So, not a recession yet, but economic concerns will continue to perpetuate decision-making rigor mortis on the part of CEOs everywhere. I continue to see “stagflation” as the more immediate concern.

Chris Van Gorder, Scripps Health

NO: I agree with those who believe we won’t slide into a recession if this war is just a few weeks long. But with 20% of the world’s oil locked up in the Gulf, I think our economy will be significantly impacted by a long war. The impact would hit Europe first and ripple through multiple economies, eventually hitting us. Adding this to the increasing unemployment rate in this country could cause a slide into recession.

Jamie Moraga, Franklin Revere

NO: Recession fears are valid in a global conflict, especially with uncertainty around duration and oil supply. But national security plays a significant role here, not only to defend U.S. interests but also to uphold global stability. Iran finances and trains militias, supports terrorist organizations, and builds missile, drone and nuclear capabilities, posing a far greater long-term threat than short-term recession risks. Preventing a nuclear-armed Iran is essential for global security, especially given its economic and strategic ties with China and Russia.

Bob Rauch, R.A. Rauch & Associates

YES: The war against Iran will not be prolonged at the current frenetic intensity beyond a few weeks. In that case, the effects on the oil market will not be significant. U.S. and Israeli attacks on Iranian launchers are succeeding, the economy is more resilient to oil shocks, and the U.S. is a net exporter of petroleum. Further, oil alone does not cause a recession, and the U.S. economy is sound.

Austin Neudecker, Weave Growth

YES: Recent economic jitters are understandable, but we should not ascribe a domestic recession directly to Iran if the conflict is short-lived. A drawn-out war with oil and supply chain disruptions could have more substantial economic impacts, but consider the revised job numbers to understand that Iran would not be the primary cause. So far, oil supply remains resilient, supply chains remain intact, and businesses aren’t curtailing investment. War fatigue at home means the administration is likely to keep the conflict limited.

Phil Blair, Manpower

NO: It almost feels like our economy is looking for an excuse to contract. Unemployment is up, consumer confidence is way down, inflation is still high, and now due to the Iran issue, gas prices are super high. Improving affordability conversations for middle-class citizens are pretty much a joke. The rich are getting richer, and the poor are getting worse off. The stock market has been the one shining light but is now very erratic and driven mostly by AI tech stocks.

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