The ongoing Iran war has significantly impacted global energy and financial markets, leading to a sharp rise in mortgage rates and fuel prices in the United States. According to Freddie Mac, the average rate on a 30-year fixed mortgage increased to 6.38% for the week ending March 26, up from 5.98% before the conflict began, marking the highest level since early September and reversing recent momentum in the housing market [1]. This surge in borrowing costs is attributed to investor concerns over inflation, which have pushed Treasury yields higher and made homeownership less affordable for many Americans [1].
The conflict has also disrupted oil tanker traffic through the Strait of Hormuz, a critical waterway that carries 20% of the world's oil, causing crude prices to rise above $100 a barrel for the first time since 2022 [1][2]. Brent crude prices have jumped 27% since the war began, and gas prices in the U.S. have risen above $4 a gallon on average, with AAA reporting regular gasoline at $4.06 a gallon as of April 1, up $1.08 from a month earlier. Diesel prices have surged to $5.04, up $1.73 over the same period [1][2]. Worldwide, jet fuel prices have increased by 96%, and liquid natural gas futures in Japan and South Korea are up 43% [2].
President Donald Trump addressed the nation, describing the recent jump in gas prices as a "short term increase" that "will rapidly come back down" once the Strait of Hormuz is reopened [2]. However, analysts and historians warn that the economic consequences may worsen before improving, drawing parallels to the 1970s energy crisis. Jay Hakes, a presidential historian, noted that the current oil shock could have a lasting impact similar to the jolts experienced in the past [2]. Analysts also fear that oil prices could surpass the record near $150 a barrel set in July 2008 during the Great Recession [2].
Patrick De Haan, head of petroleum analysis at GasBuddy, cautioned that gas prices are unlikely to return to pre-war levels for months due to the time needed for global inventories to recover. Seasonal factors, such as rising demand heading into summer and refinery maintenance, are expected to further push prices higher [1]. The rise in energy and housing costs is seen as a potential political challenge for President Trump, who has pledged to make life more affordable for American families [1].
CONCLUSION
The Iran conflict has triggered a surge in oil and mortgage rates, fueling inflation concerns and straining affordability for American consumers. While President Trump downplays the risks, analysts and historians warn of lasting economic and political consequences reminiscent of past energy crises. The market impact is high, with further volatility expected if supply disruptions persist.