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The driving force behind the current economic anxiety is oil—and more specifically, a critical disruption in its supply. After Iran shut down the Strait of Hormuz earlier this month, global energy markets were thrown into turmoil. This narrow waterway is responsible for transporting roughly one-fifth of the world’s oil and natural gas, making it one of the most strategically vital نقاط on the planet.
The consequences were immediate. Gas prices in the United States, which hovered around $2.94 per gallon just weeks ago, have skyrocketed to $3.95. That rapid rise is now weighing heavily on consumers and investors alike.
Cohn pointed directly to oil prices as the dominant factor shaping both short-term and long-term economic conditions.
“Movement in oil… it’s weighing down heavily on stock markets and other assets,” he said.
“So right now, the biggest determinant in where we go in our short-term economy and long-term economy is what goes on in the Middle East. It is the price of oil. Everything else economically is in pretty fair shape.”
Despite the current volatility, many of the underlying fundamentals from the Trump-era economy remain intact—job growth, market strength, and business investment. But those gains are now being threatened by geopolitical instability thousands of miles away.
History offers a stark warning. Energy disruptions have repeatedly triggered economic downturns in the past. The 1973 oil crisis sent prices soaring and pushed the U.S. into recession. The Iranian Revolution and the subsequent Iran–Iraq War created another wave of economic instability. Even the Gulf War triggered a major spike in oil prices and market uncertainty.
Now, analysts are warning that a prolonged disruption could once again hit global growth hard. Estimates suggest that removing 20% of the world’s oil supply could push crude prices near $100 per barrel while shaving several percentage points off global GDP growth in a single quarter.
Against this backdrop, Cohn is urging investors not to panic—but to prepare.
“I think volatility can be your friend, and it can be your enemy,” he said. “Because remember, fear and greed are what drive markets. Volatility enhances fear and enhances greed.”
His advice is straightforward: have a clear strategy before markets start swinging wildly.
“What the volatility means is you have to have a game plan,” Cohn said. “If you know where you wanna buy, and you know what you wanna sell, you will get opportunities to get in and out of markets that you may not have seen and think was possible.”
Major financial institutions are already adjusting their outlooks. Forecasts for market performance are being revised downward, and warnings of a potential correction are growing louder. Cohn himself described the current environment in stark terms, suggesting the U.S. may be facing a troubling mix of stagnant growth and rising prices.
“I think right now we’re more in a stagflationary environment. We don’t have growth, but we have prices increasing.”
That combination—slow growth paired with inflation—has historically been one of the toughest economic scenarios to navigate.
Still, officials in the administration are projecting confidence. Karoline Leavitt has emphasized that the disruption is temporary and tied to broader national security objectives.
“Once the national security objectives of Operation Epic Fury are fully achieved, Americans will see oil and gas prices drop rapidly, potentially even lower than they were prior to the start of the operation,” Leavitt said.
There are already signs of how quickly markets can shift. Oil prices dipped after President Trump signaled progress in negotiations and delayed further military escalation, reinforcing just how sensitive markets are to developments in the region.
Cohn echoed that sentiment, noting that investor behavior can change almost instantly with even a hint of positive news.
In the end, the situation remains fluid—but the stakes are clear. A single geopolitical choke point has the power to shake the global economy, impact every American household, and test the resilience of markets built over years of growth.
For now, Americans are left watching the numbers climb at the pump—while hoping the tide turns just as quickly.
