Fact Check Analysis: America’s economy could face a war shock

Introduction

A recent CNN article warns that escalating tensions between Israel and Iran could deal a substantial blow to the U.S. economy—especially if Iran follows through on threats to close the Strait of Hormuz. The article has sparked confusion among readers, particularly around one pressing question: if the United States is now considered energy independent, how would a disruption in a distant maritime route cause a spike in gas prices for Americans? In this fact-check, we investigate the accuracy of the article’s claims, analyze the economic realities, and provide clarity on energy independence and oil markets.

Historical Context

Conflicts in the Middle East—especially ones involving major oil-producing countries—have historically triggered global economic consequences. During the 1973 Yom Kippur War, the Arab oil embargo led to quadrupled oil prices and widespread gasoline shortages in the United States. Similarly, the 1979 Iranian Revolution caused another oil supply shock. Although the U.S. has since increased domestic energy production and become a net exporter, the global nature of oil pricing and refining means conflict in strategic regions like the Strait of Hormuz still carries ripple effects that reach American gas stations.

Fact-Checking Specific Claims

Claim #1: America is energy independent, so a Strait of Hormuz closure shouldn’t affect U.S. gas prices.

This claim is misleading. While the U.S. became a net exporter of petroleum products in 2019, it still imports and exports crude oil and refined products as part of an interconnected global energy market. U.S. gasoline prices are largely set by global crude oil benchmarks like Brent crude. If the Strait of Hormuz—a route through which about 20% of the world’s oil flows—is disrupted, global oil supply tightens and prices rise accordingly. Even domestically produced gasoline becomes more expensive because U.S. refineries are not isolated from market fluctuations in global crude pricing. Therefore, a closure of this chokepoint would almost certainly lead to a hike in gas prices here in the U.S., despite our current energy status.

Claim #2: 20 million barrels of oil pass through the Strait of Hormuz each day—20% of global consumption.

This claim is accurate. According to the U.S. Energy Information Administration (EIA), approximately 20.5 million barrels per day of oil transited through the Strait of Hormuz in 2023, representing around 21% of global petroleum liquids consumption. The strategic importance of this passage cannot be understated, and any disruption would constrain supply routes for major oil suppliers like Saudi Arabia, Iraq, the UAE, and Kuwait. Even if the disruption doesn’t stop oil completely, added geopolitical risk often causes traders to drive up oil futures prices rapidly.

Claim #3: The U.S. economy is less dependent on foreign oil than in the 1970s.

This statement by Federal Reserve Chair Jerome Powell is accurate and supported by data. In the 1970s, the U.S. imported over 40% of its crude oil. As of 2023, U.S. crude oil imports had dropped significantly, and the country became a net total petroleum exporter, thanks to the shale oil boom and increased domestic production. Still, “less dependent” doesn’t mean “immune.” Refining capacities, market preferences, and regional supply chains mean that the U.S. still both imports and exports different grades of crude oil and refined products to meet optimal economic efficiency. As such, dependence has been greatly reduced but is not entirely eliminated. Prices remain tied to global market dynamics.

Claim #4: If the Strait is closed, gas prices will “rocket higher.”

This is a plausible projection, not an exaggeration. Disruptions in the Strait of Hormuz—even if temporary or partial—increase geopolitical risks, limit short-term oil supply, and cause speculative purchasing in futures markets. According to the International Energy Agency (IEA), even threats of closure in the past have raised oil prices by as much as 10% within days. While strategic reserves and alternative supply routes may mitigate some long-term impacts, consumers would very likely experience a noticeable and immediate spike in gasoline prices at the pump.

Conclusion

The CNN article provides a largely accurate overview of the potential economic impact stemming from a conflict-induced closure of the Strait of Hormuz. It correctly acknowledges the U.S.’s improved energy position while also explaining that “energy independence” does not mean isolation from global oil price shocks. However, the article could have done more to clarify for readers how global pricing mechanisms work and why U.S. consumers are not exempt from oil market volatility. While Powell’s assurances may serve to ease panic, the expert assessments quoted in the article appropriately caution against underestimating the ripple effects of Middle Eastern instability.

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