Rising prices at Georgia gas pumps. Higher prices for natural gas. Wild swings on Wall Street. The United States and Israel’s widening war with Iran has stricken an already uneasy global economy with a new bout of uncertainty.
The U.S. economy has already been buffeted by the changing winds of the Trump administration’s tariff, trade and immigration policies over the past year.
Now, the increased uncertainty and new trade disruptions could drive prices — which soared coming out of the COVID-19 pandemic and have remained stubbornly elevated — even higher, Georgia analysts say.
“If there’s oil supply shocks and the price of oil increases, you could have some inflationary pressures. That’s troubling,” Tom Smith, an economist and business professor at Emory University, told The Atlanta Journal-Constitution.
“This just compounds the already existing feeling that the market is on a razor’s edge between it doing well and it doing poorly,” Smith said.
Since the U.S. and Israel launched attacks on Iran over the weekend, hundreds of people in Iran have died and dozens of people in Israel and neighboring countries have been killed in retaliatory strikes. At least six U.S. service members had also been confirmed dead as of early Wednesday morning.
Credit: AP
Credit: AP
The deadly conflict has disrupted shipping of oil and other goods as companies try to keep their crews and cargo safe. Countries across the Middle East have closed airports and temporarily shut down their air spaces, disrupting plane cargo. Ocean carriers are also changing their routes, now sending some ships around South Africa’s Cape of Good Hope instead of traveling through the Suez Canal and the Red Sea.
“When all these vessels are avoiding the shortcut … it increases the transit time, increases the freight rate,” said Christian Halpaus, CEO of Atlanta-based International Freight Forwarders. His company has provided import, export, warehousing and customs services for small- and medium-sized businesses for more than 40 years.
Halpaus said transit times could be delayed by 10 to 18 days, which will lead to equipment shortages because ships are on the sea longer.
“This is one of those perfect scenarios that shows you how small the world really is, because we are all so interdependent,” he said.
On top of increased oil prices and journey times adding to shipping costs, ocean carriers are now adding emergency surcharges. Though it is still unclear how long and how wide the war will go, if the conflict is protracted, those costs could raise prices for consumers, Halpaus said.
“From importers here in Georgia and clients here in Georgia, I don’t know yet to what degree it will impact them, but yes, the dominoes are beginning to fall,” he said.
Shipping traffic has also slowed through the Strait of Hormuz, a key waterway for global oil and liquefied natural gas supplies. The strait is a natural geographic chokepoint that sits on Iran’s southern border, pushing up the price of crude oil.
The U.S. earlier this decade became a net exporter of petroleum, but still imports oil from a number of countries, including Canada, Mexico and nations in the Persian Gulf.
Because of this, the U.S. will not experience oil shortages or face a supply issue, experts say. But the price at which crude is traded will be impacted, which will eventually trickle down to the price paid at the pump.
On Wednesday morning, the average price for a gallon of unleaded gasoline in Georgia was about $3.13, up about 12 cents from Tuesday and about 38 cents higher than a week ago, according to auto club AAA. The price per gallon a year earlier was $2.93.
Relatively low oil prices during the first year or so of Trump’s second term have been a brake on inflation, helping to keep rising prices somewhat in check, though the rate of price increases has remained above the Federal Reserve’s target for inflation.
Credit: Jason Getz/AJC
Credit: Jason Getz/AJC
On Tuesday afternoon, President Donald Trump said he had ordered the U.S. International Development Finance Corporation to provide “political risk insurance and guarantees for the Financial Security of ALL Maritime Trade, especially Energy, traveling through the Gulf,” he wrote on social media.
“If necessary, the United States Navy will begin escorting tankers through the Strait of Hormuz, as soon as possible,” he added. Crude oil prices eased slightly after the announcement.
Still, on Wednesday, a container ship was reportedly hit by a projectile in the Strait of Hormuz, according to the U.K. Maritime Trade Operations Centre. The organization said the crew had evacuated the ship and all hands were accounted for.
If shipping remains impacted, Georgians could also see an uptick in their utility bills from the war.
Global natural gas prices have increased since the fighting began. As the world’s top natural gas producer, the U.S. is likely better insulated from the market’s volatility than Europe or Asia. Still, it’s possible a prolonged Middle East conflict could raise natural gas prices in the U.S., which could eventually trickle into Georgia customers’ monthly utility bills.
The geopolitical fallout could also further disrupt trade, which has been impacted by shifting U.S. tariff policies.
On Monday, the Spanish government said the U.S. could not use its bases for its attacks on Iran, sparking Trump’s ire.
“We’re going to cut off all trade with Spain, we don’t want anything to do with Spain,” Trump said Tuesday during a meeting at the White House with German Chancellor Friedrich Merz.
Though Spain is not one of Georgia’s top trading partners, the two have had a longstanding relationship. The country has maintained a consular presence in Georgia since 1836, according to the Georgia Department of Economic Development.
In terms of trade, in 2024, Georgia imported more than $1 billion worth of goods from Spain and exported about $663 million to the country.
— Staff writers Drew Kann and Savannah Sicurella contributed to this story.
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