The Iran War: What's it Going to Cost You?

This story was updated 24 June 2025

It seems that everyone involved in this apocalyptic three-way is promising a lively week. Leaders are keeping up their chest beating in front of the camera, but the chatter through diplomatic channels is that everyone is looking for a way to back down. That’s a positive, but once you start throwing hands, the margin of error tends to take on a life of its own.

After the US bombed three nuclear sites in Iran, Israel resumed its attacks over the weekend. It is trying to sell the idea that it’s fighting an oppressive, hated regime – not Iran itself – by hitting politically symbolic targets like the a prison where political prisoners are held, the HQ of the secret police and the department that runs the nuclear program. It’s a tricky sell. Once you start hitting civilian infrastructure, civilians tend to take air strikes personally.

Oil and stock markets have jumped around, but largely settled where they'd been, That means a couple of things. First, that markets have already factored in the uncertainty. The Russian 2022 invasion of Ukraine spooked energy markets largely because there was no precedent in living memory (unless your grandfather is 104). Three years on, the market has a playbook for this violent foolishness. The second is a little more practical; oil traders don’t really care if people are killing each other near oil, but a disruption of the accessible supply of oil.

It seems that just hours after both sides agreed to a truce in the 12 Day War, both sides have accused the other of violating it with more missile attacks. So, what are the likely scenarios for a direct war with Iran and what are they likely to cost you?

On Monday, Iran launched an attack on US military installation in Qatar - and told the Qataris about it beforehand. This looks like a repeat of a saving face attack launched against a US base in Iraq in revenge for the killing of Qasem Soleimani. So far there have been no reported casualties. It looks like all involved have an off ramp, if they take it, oil prices will stay in the $70-75 p/b range.

A truce was brokered by Washington, but it is fragile and it only took hours for both sides to start pointing fingers again, If the tit-for-tat it gets out of hand, leading Israel to target Iranian oil infrastructure, say main terminal at Kharg Island, the markets will notice. That would account for a reduction in supply of anywhere from .5-1%. Now that’s enough to be felt, but right current demand is low and supply is rich, so other countries would be able to pick up the slack. Trump has pleaded with energy producers to keep prices low, and it helps that the Sunni Arab world is united in condemning Iran.Saudi Arabia, in particular, has plenty of spare capacity, and really wants the US to stay in the area. Let's put the price at $80-85 p/b.

The third scenario is the Hormuz maneuver is looking increasingly unlikely: where Iran mines or blocks the 90-mile wide outlet through which 30% of the global energy supply flows on any given day. It would be an absolutely suicidal move by the regime, but it would blow a hole in the supply. Then we’re looking at prices in the $110-120 range. The Iranian foreign minister has famously trotted off to Moscow this weekend to confer with Vladimir Putin, and while it would be a boom to Russia’s economy for oil prices to spike, that’s risky. Right now, Putin has got Trump on the sidelines in Ukraine. Offering too much support fro Iran while it is in a direct fight with the US might change that.

So what was the point of all this in the first place? To stop Iran’s nuclear program from developing a weapon. Did the assist by US GBU-57 “bunker buster” bombs obliterate the countries stock piles? Maybe, but probably not. That, however, doesn’t mean that the program hasn’t be set back by years: Israel’s strikes were intended to wreck power supplies and ventilation systems to vast underground caverns. Those bunker busters caused extensive damage, probably rendering the facilities unusable for the time being. The uranium is still around, and so is the ability to weaponize it.

Understand that unless we’re okay with invading and colonizing Iran, the nuclear threat can’t really be obliterated. Still, don’t discount the kicking the can down the road if the guy in charge is 86 - you don’t have to try too hard to out-kick the threat.

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