In early 2025, oil prices crashed to nearly $60 a barrel but rebounded to $75 due to the recent conflict.

Although the U.S. is a net oil exporter, higher oil prices could increase inflation and lower economic growth.

Critical energy infrastructure in Israel and Iran has not escaped unscathed from the first few days of the countries' escalated conflict. Worst-case scenarios have yet to be realized, but the war is already having a notable impact on energy production and exports in both countries.

At the moment, the impact on U.S. energy prices of Israel’s strikes on Iran is muted. That could change if the conflict escalates.

Rather, it is geopolitical factors—specifically, escalating tensions in the Middle East—that are unsettling markets and pushing prices higher.

The strongest action was in the oil market, where the price of a barrel of benchmark ... the situation was not escalating and there was no impact on oil supply,” according to Richard Joswick ...