Who Pays the Price of War? Spoiler: Check Your Wallet - critical summary review

The Bill Has Arrived: What's Getting More Expensive Around the World and Who Will Pay First

There is a simple test to know whether a crisis is real or just a headline. The answer is in the grocery cart. When rice prices climb in Somalia, when diesel jumps sixty percent in Italy, and when Sri Lanka brings back fuel rationing with mile-long queues and QR codes... the crisis has crossed the line from abstract to personal.

On February twenty-eighth, two thousand and twenty-six, the United States and Israel launched a coordinated military operation against Iran. Tehran's response did not come only through missiles and drones. It came by sea. Iran restricted transit through the Strait of Hormuz, the most economically valuable waterway on earth. Roughly twenty percent of global oil, a fifth of liquefied natural gas, and, a detail few people knew, nearly a third of all fertilizer traded worldwide passes through that narrow channel.

This Radar is not about the war itself. It is about what is getting more expensive because of it, who will feel it first, and what you can do with that information.

The speed of the impact is the first thing that surprises. Unlike trade tariffs, which take months to filter through supply chains, the Strait of Hormuz shock landed in days. Factory managers, farmers, and freight operators felt it before economists could publish their first reports.

Brent crude, the international benchmark, surged past one hundred dollars a barrel within the first week of the conflict. That is roughly a fifty percent increase from pre-war prices. Diesel futures hit levels not seen since two thousand and twenty-two. European natural gas, measured by the Dutch TTF index, spiked more than fifty percent. Liquefied natural gas spot prices in Asia more than doubled after Qatar declared force majeure on production, following Iranian drone strikes on its gas facilities.

But here is the detail that changes everything: the Strait of Hormuz is not just an oil artery. It is a food artery. Saudi Arabia, Qatar, the United Arab Emirates, Oman, and Iran itself are major producers of nitrogen fertilizers such as urea and ammonia. Production depends on natural gas, which is now extremely expensive. Shipping depends on the Strait, which is now effectively closed. The result: the price of urea, the most widely used fertilizer on the planet, jumped roughly fifty percent in under three weeks. At the port of New Orleans, the main import hub for the United States, urea went from five hundred and sixteen dollars per metric ton in February to six hundred and eighty-three dollars in March. In terms a farmer understands: in December, one ton of urea cost the equivalent of seventy-five bushels of corn... now it costs one hundred and twenty-six.

And fertilizer has a cruel detail. Unlike oil, there is no strategic fertilizer reserve. No government in the world stockpiles urea or ammonia the way it stockpiles barrels of crude. The chief economist of the FAO, the United Nations food agency, was blunt: the loss of Gulf exports creates an immediate global shortfall with no quick substitutes.

Let us look at the map. Who is feeling this the most?

Start with Asia, which is absorbing the hardest blow. Eighty-four percent of the crude oil and eighty-three percent of the liquefied natural gas that moved through the Strait was bound for Asian countries. Japan imports ninety percent of its oil from the Middle East, nearly all of it via Hormuz. South Korea, seventy percent. India, which imports roughly ninety percent of all the oil it consumes, is in a particularly fragile position... more than half its crude and three-quarters of its cooking gas come through the Strait.

In the Indian city of Pune, authorities suspended the use of cooking gas for cremations to preserve supply for households. In Pakistan, the national cricket league banned spectators from stadiums as a fuel conservation measure. The government imposed a four-day workweek for public employees and enacted the largest single-day gasoline price increase in the country's history.

Sri Lanka may be the most dramatic case. A country entirely dependent on imported fuel, still recovering from its two thousand and twenty-two economic collapse, when it defaulted on sovereign debt for the first time. In March two thousand and twenty-six, the government declared a four-day workweek, reintroduced fuel rationing through a QR code system, and raised gasoline and diesel prices by twenty-five percent... for the second time in two weeks. A liter of gasoline returned to the price level of the two thousand and twenty-two collapse. Analysts project the country's inflation could rise by five to eight percentage points. Economic growth, forecast between four and five percent, could fall to two and a half. President Dissanayake told the nation to prepare for a prolonged conflict.

Bangladesh, the Philippines, Vietnam, and Thailand also adopted emergency measures. Governments sent employees to work from home, closed schools, reduced public transit schedules. In Thailand, civil servants were told to take the stairs instead of elevators and swap suits for short sleeves to cut air conditioning costs. It may sound like a small detail, but when a government asks its employees to take the stairs to save energy, the signal is clear: the margin is gone.

Now, sub-Saharan Africa. This is where the crisis could turn into a catastrophe.

More than ninety percent of the fertilizer consumed in sub-Saharan Africa is imported. In countries like Sudan, which imports over eighty percent of its wheat and has been engulfed in civil war for nearly three years, and in Somalia, which is battling drought, food prices have already risen twenty percent as a direct effect of the Iran war. The World Food Programme estimated the conflict could push an additional forty-five million people into acute food insecurity, taking the global total above its record of three hundred and nineteen million.

The trap for these countries is twofold. On one side, half the average household budget already goes to food. Any increase of five or ten percent in food prices is devastating. On the other, governments have no fiscal room to absorb the shock. If they maintain fuel subsidies, deficits explode. If they remove them, streets erupt. There is no good answer to that equation.

In Europe, the problem has a different flavor. The continent entered the crisis with natural gas storage at historically low levels, around thirty percent of capacity, after a harsh winter. Gas prices nearly doubled. The eurozone, already growing slowly, now faces projections of contraction in the second quarter and stagnation through the second half of the year.

The European Central Bank is under pressure to raise rates. Traders have already priced in nearly three quarter-point increases by year-end. The Bank of England signaled it may raise rates as early as April. These are decisions that sound technical, but translated into everyday life they mean higher mortgage payments, more expensive credit, and slower investment.

In Italy, Francesco Scala, a third-generation winemaker in Calabria, watched diesel prices jump sixty percent right at planting time. Fertilizer and pesticide costs doubled as shipments that used to transit Hormuz stalled. American tariffs were already compressing demand for Italian wine in the United States. His calculation was precise: if I add one euro to the price of a bottle, I am certain I will sell less wine. So he swallows the cost, compresses his margin, and hopes the conflict ends before the next harvest.

In the United States, the mechanism is different, but the outcome converges. The Trump administration had planned a quiet stimulus for two thousand and twenty-six: tax refunds roughly twenty billion dollars larger than the previous year. The idea was to put money in household pockets and sustain consumer spending.

The war is eroding that strategy in real time. Citigroup economists calculated that a twenty percent increase in fuel prices forces Americans to spend roughly six billion dollars more per month on gasoline alone. If prices remain elevated for three to four months, the entire tax refund advantage will have been consumed by the gas tank.

In California, gasoline has already crossed five dollars a gallon. Farmers who were already losing money growing corn and rice, with farm debt at an all-time high, now face fertilizer that is thirty percent more expensive and diesel at record levels. The government distributed seven billion dollars in assistance, but as one Iowa farmer put it: the check barely hit the farm before it went right back out the door to the fertilizer dealer.

There is a layer to this crisis that goes largely unnoticed. The Strait of Hormuz is not just oil and fertilizer. Qatar produces roughly forty percent of the world's helium, a gas essential to semiconductor manufacturing and medical imaging equipment like MRI machines. Sulfur, a byproduct of oil and gas processing, is a critical input for the copper industry and for sulfuric acid production. Gulf countries account for roughly forty-five percent of global sulfur trade. When sulfur stops, mining supply chains stall, electronics supply chains feel it, and prices rise on products that seemingly have nothing to do with the Middle East.

And then there is water. Iranian strikes hit desalination plants in Bahrain and came close to a complex housing forty-three plants in Saudi Arabia. There are four hundred desalination plants across the Gulf region, responsible for nearly forty percent of the world's desalinated water. In Kuwait, ninety percent of drinking water comes from these facilities. One hundred million people depend on them for clean water.

Bloomberg Economics mapped out two paths. If the conflict lasts weeks and the Strait remains blocked, oil settles near one hundred and ten dollars a barrel. Under that scenario, eurozone and United Kingdom GDP contracts by roughly half a percentage point, inflation rises by about one point, and the United States sees inflation running zero point seven percentage points above its pre-war trajectory.

If the conflict stretches to three months, oil could approach one hundred and seventy dollars. All damage estimates roughly double. The World Trade Organization warned that its projection of one point nine percent growth in global merchandise trade for two thousand and twenty-six is at serious risk.

On March twenty-fourth, Trump extended the Strait reopening deadline by five days, citing ongoing negotiations. Markets responded instantly: oil dropped, equities recovered, Treasury yields fell. The reaction confirmed what every analyst already knew... the single most important variable for the global economy in the coming months is not any country's GDP, not any central bank's interest rate. It is whether this conflict ends in weeks or in months.

What to do with this information

Let us break it down by scenario.

Scenario one: resolution within weeks. If a credible ceasefire emerges in the next two to four weeks, oil prices retreat, markets breathe, and the global impact is limited to a temporary inflationary hiccup. In that case, most economies absorb the shock without structural changes. For investors, the current volatility may create entry opportunities in assets that have fallen further than their fundamentals justify, particularly in Asian emerging markets. For consumers, it is worth holding off on major purchases that depend on freight or imported inputs, waiting two to three weeks, and reassessing.

Scenario two: conflict drags on for two to three months. Here the picture shifts. Inflation consolidates, central banks raise rates more aggressively, credit tightens, and consumer spending slows. Countries like Sri Lanka, Pakistan, and sub-Saharan African nations face real risk of fiscal crisis. For the United States, this scenario means grocery prices climb further as fertilizer and diesel costs pass through the food supply chain. American farmers are already operating at a loss on several staple crops, and prolonged input cost increases would accelerate farm bankruptcies and ultimately raise prices at the checkout. In this scenario, it makes sense to review any long-term financial commitments, avoid variable-rate debt, and, where possible, lock in prices on essential inputs before the pass-through reaches retail.

Scenario three: escalation or prolonged disruption. This is the scenario economists call stagflation... weak growth with high inflation, a combination that makes every policy decision painful. If oil reaches one hundred and seventy dollars, the impact on the cost of living will be felt in everything from bus fares to electricity bills. In that case, priorities shift to preserving liquidity, reducing exposure to energy-sensitive sectors, and remembering that in every supply crisis, those who hold inventory sell high and those who need to buy pay the price.

A final note.

In two thousand and twenty-two, when Russia invaded Ukraine and the world faced a similar energy and fertilizer shock, the workaround was to increase imports from the Middle East. That door is now closed. There is no equivalent Plan B. The resilience of the global food system is being tested for the second time in four years, and this time, the safety net is thinner.

Each additional week of conflict does not add damage in a straight line. It multiplies it.