BAKERSFIELD, Calif. (KERO) — From gas prices to grocery bills, a conflict between the United States and Iran could soon hit consumers at home.
I spoke with Aaron Hegde, a local economics professor, who says roughly 25% of the world's oil and about 20% of its natural gas move through the Middle East. If conflict disrupts those routes, supply tightens — and prices rise.
"Any kind of war, it also has an impact because war costs money, and money has to come from somewhere," Hegde said.
"From a consumer point of view, that means more uncertainty; inflation is a little higher, which means they have less money to spend," Hegde said.
Hegde points out Iran alone accounts for about 5% of the global oil supply. He identifies three immediate concerns for consumers.
The first and most immediate impact would likely be gasoline prices at the pump. The second could be felt in the stock market, where energy stocks could rise while consumer-focused companies may struggle — a volatility that can affect retirement accounts and investments. The third impact, Hegde says, would be on inflation.
"If this continues and the energy prices go up, then inflation will be back again. Instead of 2.4%, it might be 2.6 or 2.7," Hegde said.
There is also the question of the U.S. dollar. Historically, during global conflicts — like after the Gulf War — investors moved money into the U.S., strengthening the dollar. If that happens again, Hegde says it creates a mixed bag. A stronger dollar makes imports cheaper, which could ease some inflation pressures, but it also makes American exports more expensive overseas.
"So the people who have to pay you in US dollars to buy our goods will buy less. So our exports will go down, and in Kern County, agriculture depends heavily on exports. So as the dollar gets stronger, then the exports will decline, which will impact us directly in terms of AG," Hegde said.
Hegde also sees a potential upside. If oil prices surge above $100 per barrel and stay there, Kern County could eventually see increased drilling activity and potentially more jobs — but that depends on whether restrictions on drilling are lifted.
"If the regulations are just as strict, then even at 100, 110 dollars, it might not be worth it for companies to come back to drill," Hegde said.
Hegde says that would be a long-term effect, not something consumers would feel immediately. How severe the short-term impacts become will largely depend on how long the conflict lasts and whether it remains regional or expands globally.
For now, Hegde says uncertainty is the biggest economic factor, and people should be prepared for possible price swings in the weeks ahead.
This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.
Stay in Touch with Us Anytime, Anywhere:
