The Lasting Impact of the Persian Gulf War

Mar 24, 2026

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On today’s show, we’re talking about the lasting impact of war in the Persian Gulf on oil prices, and more importantly, the cascading effects on real estate here in the United States.

When conflict broke out in the Persian Gulf, the first reaction in financial markets was almost automatic. Traders bid up the price of oil. That response is understandable. A large portion of the world’s seaborne crude passes through the Strait of Hormuz, and any threat to supply got reflected in price almost instantly.

But here’s where we need to separate headlines from economic reality.

A spike in oil prices does not affect every form of energy equally. In the United States, natural gas is largely a domestic market. It has its own supply dynamics, its own pipeline network, and its own storage system. So even if crude oil jumps dramatically because of geopolitical tensions, natural gas in the U.S. may hardly move. The US exports about 20% of its natural gas production. That percentage is limited by the capacity of the existing LNG plants. When all the LNG plants under construction are completed, the percentage of US production available for export might increase to 30 and maybe eventually 40%. But that is years and possibly decades away.

So where will we actually see the impact?

We’ll see it first in transportation.

Diesel prices matter enormously. Diesel is the fuel of the real economy. It moves construction materials, food, appliances, furniture, HVAC equipment, steel, lumber, concrete additives, and labor crews. If diesel rises meaningfully, the cost of moving goods rises with it. That affects construction sites, distributors, warehouse operators, and every supplier feeding construction.

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