Iran Says the Strait of Hormuz Will Stay Closed. What Happens to the US Economy Next?

The U.S. fuel supply could be headed for a reckoning as the Iran conflict continues to disrupt energy supplies.

Some analysts believe the shortfall will wreak havoc, while others are counting on the U.S. economy adapting relatively painlessly to the new conditions.

The Iran war’s disruptions to crude oil supplies are about to cause major problems—or maybe the U.S. economy can pretty much shrug it off. With the global energy market entering uncharted territory, the answer depends on whom you ask.

A pair of analyses released on Friday reached opposite conclusions about the risk the U.S. economy faces from the ongoing closure of the Strait of Hormuz. The crucial waterway between Iran and Oman is the route through which 20% of the world’s oil supply usually flows to global markets from the Persian Gulf.

This question became even more salient on Monday after Iranian officials said they had withdrawn from peace negotiations and vowed to “completely block” the strait, according to Iranian state media and reported by CNBC. The news jolted oil prices up 7% on Monday morning.

Forecasters at Goldman Sachs said the U.S. economy would be relatively unscathed even if the strait never reopens. Meanwhile, HFI Research, a self-described “contrarian” investment research firm, said energy markets were about to hit a wall and risked gasoline shortages in the coming months.

The contrasting forecasts represented the extremes of possible outcomes as the Iran conflict entered its fourth month, prolonging what the International Energy Agency called the “largest supply disruption in the history of the global oil market.”

The trajectory of the U.S. economy could depend on whether oil resumes flowing through the Strait of Hormuz , and how well it can adapt if that never happens.