The Iran Economic Shock Just Started (how to protect yourself)

TL;DR

The Iran war's closure of the Strait of Hormuz has already doubled oil prices, triggering inflation, job risk, and stagflation that will hit ordinary people before governments can respond.

Key Points

• 1.The Strait of Hormuz closure doubled oil prices in three months. A US-Israel strike on Iran (Operation Epic Fury, ~900 strikes on Feb 28) triggered Iran's closure of the strait on March 2, sending oil from $61 to over $118 per barrel — the biggest rise in nearly 40 years.
• 2.The ceasefire is fragile and the economic damage is already in motion. Trump's 2-week ceasefire brought temporary relief, but the US Navy still warns vessels to avoid the waterway due to uncleared sea mines, meaning supply uncertainty continues to drive prices up.
• 3.Rising energy costs will push up food, transport, and bills for months. Oil is embedded in every step of the supply chain; energy prices are already up double digits in 2025 and could rise further over the next 3–6 months as the shock works through the system.
• 4.Job losses are the hidden second-order risk of the oil shock. Businesses face a cost squeeze from two sides — higher operating costs and lower consumer spending — mirroring conditions last seen during the 2008–2009 financial crisis by hiring-rate metrics.
• 5.Governments have almost no tools left to cushion the blow. The US can't cut rates (inflation is rising), can't easily print money ($39 trillion debt with ~$1 trillion/year in interest payments alone), and any dollar-weakening move risks credibility.
• 6.Stagflation is the named economic scenario now taking shape. US inflation jumped to 3.3% from 2.4% the prior month while Goldman Sachs cut GDP growth to 2.1%; Moody's AI recession model — never wrong above 50% in 80 years of data — sat at 49% before the Iran war even began.
• 7.The dollar's reserve-currency status is being quietly challenged by major economies. Foreign central bank US Treasury holdings are at their lowest since 2012; gold now represents 24% of central bank reserves vs. 21% for treasuries — a complete reversal from 2015 when treasuries were 33% and gold just 9%.