- Israel and Hamas are currently at war after a series of surprise terror attacks were launched earlier this month.
- The conflict could expand to include countries like Iran, which would constrict oil supply and possibly send the U.S. and the world into a recession, according to experts who spoke to the Daily Caller News Foundation.
- “International oil prices would spike to over $100 a barrel on supply disruption concerns and financial markets would be rattled by heightened geopolitical uncertainty,” Desmond Lachman, a senior fellow at the American Enterprise Institute, told the DCNF.
(Daily Caller)—The conflict between Israel and Hamas could spell economic disaster for the global economy and for Americans if it further destabilizes the Middle East, according to experts who spoke with the Daily Caller News Foundation.
The Middle East is embroiled in tension after Hamas launched a series of surprise terror attacks against Israel on Oct. 7, resulting in Israel declaring war and preparing for a possible ground invasion into Gaza. An escalation to include neighboring states like Iran could lead to huge oil price spikes, higher inflation and a possible U.S. and world recession, according to experts who spoke to the DCNF.
“The way that the Israel-Hamas crisis affects U.S. households depends very much on how the conflict evolves,” Desmond Lachman, a senior fellow at the American Enterprise Institute, told the DCNF. “If it is confined to Israel and Hamas, the impact on the U.S. household would be negligible. This appears to be the market’s expectation, as indicated by the fact that oil prices have not increased very much. On the other hand, if the conflict were to become region-wide and especially if it were to include Iran, the U.S. household would be adversely affected in a meaningful way.”
Iran-backed militia groups in Iraq and Syria have launched a number of mostly unsuccessful drone and rocket attacks on bases hosting U.S. troops since Oct. 17. Military and defense leaders believe that Iran is undertaking these attacks to provoke the U.S. into outright war in order to cascade the current Israel-Hamas conflict across the Middle East.
“Limited to Israel and Palestine, the economic implications of the conflict would likely be minimal,” Peter Earle, economist at the American Institute for Economic Research, told the DCNF. “But because numerous nations are aligning behind the combatants amid a broader division, there are numerous economic implications. The recent coalescence of BRICS-11, where Brazil, Russia, India, China, and South Africa were joined by Iran, Saudi Arabia, the UAE, Argentina, Egypt, and Ethiopia is explicitly a rampart against Western influence.”
“Most, if not all, of the BRICS-11 are on the other side of the table (or barbed wire) from the US and much of Europe in this conflict,” Earle continued. “So for U.S. consumers, some near-term economic consequences may involve oil (and thus gasoline) prices, the prices and availability of goods imported from China and Brazil (among others), and financial market volatility on 401Ks.”
The coalition added six new countries at the most recent BRICS summit in August, including Egypt, Iran and Saudi Arabia. Russian President Vladimir Putin referred to the group as the “new world order,” with the summit also featuring calls to abandon the dollar as the world reserve currency.
“International oil prices would spike to over $100 a barrel on supply disruption concerns and financial markets would be rattled by heightened geopolitical uncertainty,” Lachman told the DCNF. “Higher oil prices would lead to higher gasoline prices which in turn would be reflected in headline inflation. That would make the Fed’s job all the more difficult in that it would prevent the Fed from reducing interest rates anytime soon.”
Watch Americans reaction to being asked to fight alongside Hamashttps://t.co/N5U5vWtWnI
— Daily Caller (@DailyCaller) October 27, 2023
The price of oil currently stands at around $85 a barrel, peaking earlier in October at $89.37 per barrel, which was up from a low this year of $66.74 in March, according to Market Insider. The Biden administration recently sought to refill the strategic petroleum reserve at the high price of $79 a barrel after it was depleted of much of its supply to address high gasoline prices.
Inflation has remained persistently high after peaking at 9.1% in June 2022 and then decelerating down to 3.7% for both September and August, despite the Federal Reserve’s 2% inflation target. The price of fuel oil has contributed significantly to the inflation seen in recent months, increasing 8.5% month-over-month in September and 9.1% for the month in August, according to the Bureau of Labor Statistics.
“If two or more major oil-producing nations got into a shooting war, and if they began targeting one another’s oil production facilities, it would send global energy prices skyrocketing,” Earle told the DCNF. “That, plus the numerous consequential impacts, would likely tip an already vulnerable US economy into a recession. It’s quite possible it would also undo a substantial amount of the disinflation which the Fed’s rate hikes have caused. Not only would rising oil prices result in rising prices for a broadening number of goods and services, including transportation, but the Fed would likely lower interest rates, once again expanding the money supply.”
The Fed, in an attempt to bring down inflation, has raised rates to a 22-year high following 11 hikes since March 2022, bringing the federal funds rate to a range of 5.25% and 5.50%. The Fed will have a chance to change its rate at the upcoming Federal Open Market Committee, which will take place over Oct. 31 and Nov. 1.
“The bottom line is that if the conflict were to spread we would very likely get both higher U.S. inflation and a U.S. and world economic recession,” Lachman told the DCNF.
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Two Storms, One Harvest
Every food crisis in living memory has been a one-shock event. The 2008 price spike was a commodity bubble. The 2020 shortages were a logistics failure. The 2022 grain scare was a war on one exporter’s ports. Each time, the system bent, adjusted, and recovered, and each time the experts assured us afterward that global markets are simply too big and too diversified to fail.
What nobody in Washington seems eager to discuss is that 2026 is shaping up to be something the modern food system has never actually faced. Two independent shocks, one climatic and one geopolitical, are converging on the same harvest cycle at the same time. Not sequentially. Simultaneously.
Start with the weather. The Pacific Ocean is currently building toward what forecasters now openly call a record event. NOAA’s Climate Prediction Center puts the odds of at least a strong El Niño near 88 percent, with roughly two in three odds it reaches “very strong” status, the tier reserved for perhaps three or four events in the entire satellite era. Every major global model now projects a median peak in Super El Niño territory, and most of them project it exceeding the 2015-16 event, which until now held the modern record. Sea surface anomalies were already brushing the super threshold in mid-July, months before these events normally peak. The atmosphere has already shifted into El Niño mode, and the event is forecast to crest in late fall and early winter.
This is not about “climate change.” It’s about the standard cycles of weather, and the cycle we’re currently in is one that has likely devastated societies in the past. We’re better prepared as a society today, but not all Americans are equally prepared.
Serious households have started doing the quiet math on their own. Grocery bills tell part of the story, and the forecast maps tell the rest, which is why long-term food storage has moved from fringe hobby to mainstream line item in the family budget, with established suppliers like Heaven’s Harvest seeing demand from people who five years ago would have rolled their eyes at the idea. That instinct is not paranoia. It is pattern recognition, and the pattern is worth walking through carefully.
Editor’s Note: Heaven’s Harvest IS a sponsor, but the warnings of this article are real and would be written even if we didn’t have a survival food sponsor. With that said, those who take advantage of what they offer can use promo code “Patriot” for 15% off.
The Fertilizer Clock Is Already Running
While the Pacific warms, the second shock has been unfolding in the Strait of Hormuz. The conflict with Iran turned the world’s most important energy chokepoint into a contested waterway, and the consequences reach far beyond the gas pump. Roughly a third of global fertilizer trade moves through Hormuz, and the disruption sent urea prices up 86 percent year over year by March, with a 53 percent jump in a single month.
The World Bank projects energy prices rising about 24 percent in 2026 and fertilizer about 31 percent. By its own accounting, fertilizer prices ran 35 percent higher in the first five months of this year than the same period last year.
Here is the mechanism the nightly news will not explain. Fertilizer is not a grocery item. It is a time-delayed input. The nitrogen a farmer in Iowa or Punjab could not afford to apply this spring does not show up as a problem this spring. It shows up as a thinner harvest six to twelve months later.
The World Bank’s own food security brief concedes that the effects of reduced applications earlier this season “are likely to become visible only later in harvest outcomes.” Translate that from institutional language into plain English and it means this. The damage is already done, it is already in the ground, and we are simply waiting for it to arrive on the shelf.
Now check the calendar. Six to twelve months from the spring planting season lands us squarely in late 2026 and early 2027. Which is precisely when the strongest El Niño in the instrumental record is forecast to peak, bringing its signature droughts to Southeast Asia, Australia, southern Africa, northern Brazil, and South Asia, the very regions that grow the world’s rice, sugar, and oilseeds.
The World Bank warns openly that a strong El Niño “could disrupt multiple crop belts simultaneously” on top of the conflict-driven input costs. Their baseline projection assumes the Middle East disruptions ease by autumn. What in the last two years of Middle East history suggests that assumption is safe?
The System Has No Slack Left
The comfortable answer is that global markets always adjust. But adjustment requires slack, and the slack is gone. Global cereal production is expected to decline from last year’s records even before El Niño does its work. The UN World Food Programme, hardly a den of right-wing preppers, is calling this the most significant disruption to its supply chains since Covid and the invasion of Ukraine, and its supply chain director put the stakes bluntly.
Today’s supply chain challenges are tomorrow’s hunger crisis.
There is also a political dimension that markets cannot price. When food gets scarce, governments do not behave like economists. They behave like politicians. Export bans, hoarding mandates, and panic buying at the national level turned the modest rice shortfall of 2008 into a global crisis, and analysts are already warning that import-dependent nations are the first dominoes.
The 2015-16 Super El Niño, a far weaker event than what is now forecast, threw tens of millions into food stress across Africa and Asia. This one is projected to be stronger, and it arrives with fertilizer already rationed by price and shipping lanes already contested by missiles.
What Joseph Knew
Scripture does not treat preparation for lean years as faithlessness. It treats it as wisdom delivered in advance to those willing to act on it.
Behold, there come seven years of great plenty throughout all the land of Egypt: And there shall arise after them seven years of famine; and all the plenty shall be forgotten in the land of Egypt.
Joseph did not respond to that warning with a hashtag or a committee. He stored grain during the years of abundance, and when the famine came, Egypt stood while its neighbors begged. The lesson is not that famine is certain. It is that the time to prepare is precisely when preparation still looks optional.
Nobody who filled a pantry in a year of plenty has ever regretted it, and nobody standing in an empty aisle has ever been glad he waited for certainty.
None of this calls for panic, and panic is the enemy of sound judgment anyway. It calls for the same unglamorous prudence our grandparents considered ordinary. Keep some cash margin, know your local growers, and put real food in deep storage while it is cheap and available, because the entire arc of this story is that cheap and available is a closing window.
Families looking for a straightforward place to start can visit Heaven’s Harvest and use promo code Patriot for 15 percent off long-term storable food. The forecasts may yet soften, the strait may yet reopen, and we should pray they do. But hope is a fine thing to hold and a foolish thing to eat.