Paul Krugman argues that Donald Trump is overestimating the success of the Iran war despite rising oil prices and refining shortages.

Paul Krugman argues that Donald Trump is currently overestimating the success of the Iran war, describing the conflict as a "quagmire" driven by personal vanity. While the headline price of oil has reached approximately $100 a barrel, Krugman notes that the effective price for end users is much higher due to a global shortage of refining capacity. This shortage, exacerbated by the war and Ukraine’s campaign against Russian infrastructure, means the world is facing the economic impact of $140 oil. The conflict has also disrupted the Strait of Hormuz, a critical supply chain choke-point. While the global economy has avoided a total meltdown so far, Krugman warns that the situation may worsen as Houthi rebels attack shipping in the Red Sea and inventories dwindle. Furthermore, the administration announced a new round of tariffs, which may lead to higher interest rates and increased pressure on families and businesses. Krugman suggests that if the administration continues to escalate the war without admitting failure, the economic and human impacts will become significantly more severe.

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