Investors Win, Consumers Lose as the Iran War Changes the Economy Six Months In

Six months ago, the United States and Israel began bombing Iran, and many experts feared the worst. They predicted oil prices would skyrocket, economies around the world would collapse, and a global recession would hit fast. But six months into the conflict, those extreme predictions have not fully come true — even though the war has touched nearly every part of the world's economy.

When the U.S. and Israel attacked Iran on February 28, stock markets took a hard hit. Investors were scared, and major indexes like the Dow, S&P 500, and Nasdaq all dropped. The S&P 500 had its worst month since 2022, and markets fell for five weeks in a row.

But then something surprising happened — the markets bounced back. Since hitting a low point in late March, the Dow has gained nearly 19%, the S&P 500 is up about 22%, and the Nasdaq has jumped 27%. Investors who stayed calm and didn't sell their stocks ended up doing very well. The International Monetary Fund noted that excitement about artificial intelligence helped offset the economic damage caused by the war.

The war's biggest economic impact has been on oil prices. Ships moving oil through the Strait of Hormuz — a key waterway near Iran — slowed way down. This caused the price of oil to jump from about $72 per barrel before the war to nearly $120 at its peak.

Higher oil prices have made travel much more expensive. Jet fuel is expected to cost 70% more in 2026 than it did in 2025. Airlines have raised ticket prices, added fees, and cut flights — for example, Lufthansa canceled 20,000 short-haul flights. Economist Brett House from Columbia University said it is very unlikely that airfares will come back down anytime soon, because there is less competition among airlines to keep prices low.

The high cost of oil gave clean energy a big boost. Electric vehicle, or EV, sales hit records in many countries. In Singapore, EV sales grew 110% compared to the year before, in New Zealand the number jumped 180%, and in Colombia EV sales shot up 300%.

Countries that relied heavily on oil from the Persian Gulf region have moved quickly to find alternatives. Leaders in Southeast Asia and Africa have pushed for more solar power, renewable energy, and even nuclear power. A supply chain expert named Scott Lehmann counted 26 countries and regions that have announced new clean energy plans because of the war.

For people with enough money, rising costs may not be a big deal. But for the world's poorest people, the war has made life much harder. The Persian Gulf region produces not only oil but also fertilizer, which farmers need to grow crops, and fertilizer prices spiked 44% above pre-war levels in April.

Some farmers used less fertilizer to save money, but that could mean smaller harvests next year. The United Nations World Food Programme has warned that tens of millions of people could be pushed into hunger. Its acting director, Carl Skau, said higher oil prices make everything more expensive — from shipping food to buying flour, rice, and vegetables.

Some businesses connected to President Donald Trump's family have made money from the conflict. A military company called Powerus, being taken public by Eric Trump and Donald Trump Jr., won an Air Force contract worth up to $90 million. Donald Trump Jr. also joined a private equity firm that owns shares in several military companies benefiting from the war. A White House spokeswoman said the president 'only acts in the best interests of the American public,' though many critics have raised concerns about whether these business ties are appropriate.