Nobel laureate Paul Krugman warns that the Iran conflict could trigger a US economic collapse if it continues much longer. The war has already disrupted the Strait of Hormuz, cutting off approximately 20% of global liquefied natural gas and petroleum products that normally transit through the waterway. This has caused Brent crude prices to jump over 10% since the conflict began.

Krugman argues the economic impact extends beyond energy prices. The conflict creates uncertainty at a time when the US economy faces multiple stresses, from inflation to trade tensions. Rep. Joe Morelle estimates the war could cost $1 billion per day, with administration officials reportedly preparing a $50 billion Congressional request to fund military operations in the Middle East.

The Nobel economist emphasizes that energy infrastructure damage poses additional risks. Iranian forces have already targeted oil facilities, including an attack on a Bahrain refinery. With no clear endgame and rising daily costs, Krugman warns the conflict could be the final pressure point that destabilizes an already fragile US economy.