The sharp swings in oil prices following the latest round of attacks and negotiations over safe passage through the Strait of Hormuz demonstrate that wars do not always reveal themselves first on the battlefield. Sometimes, their earliest signs appear on gas-station price boards, in transportation bills, and on the balance sheets of farmers standing thousands of miles from the front lines. Now that the confrontation between the United States and Iran has moved beyond pressure and deterrence and turned into direct military conflict, the issue is no longer limited to security calculations. It is about the real costs of war – costs increasingly borne by American farmers, truck drivers, and consumers.
The economic effects of this war are being transmitted through channels that are highly sensitive for Washington politically: energy markets, inflation, supply chains, and, above all, agriculture. A war that Trump justifies in the language of national security and displays of strength could, in practice, become a self-inflicted shock to the U.S. economy. That is the central contradiction: the most direct pressure is falling on the very social and economic constituency Trump has repeatedly claimed to defend – the American farm belt.
The Energy Shock, From Hormuz to American Farms
The Strait of Hormuz, through which roughly 20 percent of global petroleum liquids consumption passes, now lies at the center of the conflict. Repeated surges and declines in oil prices show that even news of a temporary pause – or the possibility of renewed escalation – can shake the energy market. Higher fuel prices feed directly into transportation, production, and consumer-goods costs, adding to inflationary pressure. This also leaves monetary policymakers caught between controlling inflation and preventing a further slowdown in economic growth.
Market instability and direct military expenditures are rising as well. The wars in Iraq and Afghanistan showed that the true cost of military conflict often extends far beyond initial estimates. Brown University’s Costs of War Project has placed the cost of the post-9/11 wars at approximately $8 trillion. A war with Iran, particularly if it becomes prolonged or expands geographically, could generate new and uncertain financial commitments. Yet one of its deepest and least visible consequences may be felt not on Wall Street, but on American farms.
Modern American agriculture is intensely dependent on energy. Diesel powers farm machinery; natural gas is a primary input in the production of nitrogen fertilizers; and gasoline and transportation fuels move crops from farms to markets. The U.S. Department of Agriculture has repeatedly shown that higher energy prices increase production costs and reduce farm income, ultimately affecting food prices.
The pressure is even more severe in the fertilizer market. The production of ammonia and urea is directly dependent on natural gas, while disruption in the Strait of Hormuz has constrained global supplies of raw materials and fertilizer. During the first weeks of the war, urea prices nearly doubled, leaving American farmers to confront fuel-price increases and supply shortages at the same time. Under such conditions, corn production, which requires more nitrogen fertilizer, becomes especially vulnerable. Farmers may be forced to choose among reducing planted acreage, switching crops, or accepting substantially higher costs.
Hellbound and Down 