There’s a new uncertainty hanging over the economy.
Oil prices.
Worse yet? The war shows no sign of ending any time soon, meaning the full consequences — how deep, how long, and how far the damage will travel across the economy — remain to be seen.
For business owners, the question isn’t when the war will end. We can’t know for sure. The question is, how do we prepare for the unknowable?
What’s Already Happened? The Economic Damage So Far
The numbers are stark.
Within weeks of the conflict, crude prices nearly doubled before settling ~50% higher than the 2025 average, and gas prices have risen from ~$3.00 per gallon to ~$4.50 since the beginning of the year, according to Energy Information Administration data.
For businesses, the consequences will extend well beyond the pump. In his annual shareholder letter, Jamie Dimon comments on the potential fallout:
“Because of the war in Iran, we additionally face the potential for significant ongoing oil and commodity price shocks, along with the reshaping of global supply chains, which may lead to sticker inflation and ultimately higher interest rates than markets currently expect.”
The macroeconomic picture isn’t much better. CPI rose from ~2.4% to ~3.8% over the same period, the PPI rose from ~3% to ~6%, and the IMF predicts a prolonged conflict could slow global GDP growth considerably.
Meanwhile, recently appointed Federal Reserve Chair Kevin Warsh faces a dilemma. The economy hasn’t been below its 2% inflation target in over five years; will he raise rates to contain new price pressures? Or hold steady to avoid choking off growth?
What Happens Next? Truth Is, Nobody Knows
The war in Iran is a new stressor on top of an already stressed system: tariff uncertainty and fallout, softening global growth, and elevated inflation levels, to name a few. Taken together, even the most experienced CFOs at the largest financial institutions run multiple contingency models rather than single-point forecasts.
For instance, the world is drawing down reserves to cushion the shock, but depending on which analyst you ask, some regions may be running dry as early as the end of the month or as late as the end of the year.
“A lot of spare capacity has already been depleted,” Chevron CFO Eimear Bonner shares. “We’re going to see some import-dependent countries potentially face critical shortages as we get into June-July.”
Insights Global research manager Lars van Wageningen elaborates:
“There’s enough supply in the short-term, but summer demand could cause stocks to dry up in five months.”
The trouble is, estimating global oil reserves is part art, and part science. We’re not even sure how much oil is out there, nor how long the conflict will last. And depending on different factors, any number of outcomes are possible.
“What is a reasonable range of possibilities?” Nobel laureate Paul Krugman asks. Anywhere between $99 and $372 per barrel, depending on how the conflict plays out, according to his analysis.
Jamie Dimon points out our relative resilience, compared to the 1973 and 1979 shocks, while also acknowledging risk.
“The United States, instead of being a major oil importer, is now a net exporter. Additionally, global energy consumption relative to GDP is only about 40% of what it was in the early 1980s… but while the economy may be less fragile than in the past, this alone does not mean there is no ‘tipping point.’ It just may mean it could take more straws on the camel’s back to get there.”
Preparing for an Unknown Future: Hope for the Best, Plan for the Worst
The appropriate response to uncertainty isn’t paralysis, nor is it false confidence.
It’s scenario planning.
Businesses that navigate the next 12 to 18 months best will be those that built the financial infrastructure to adapt, not just the ones that happened to guess right about oil prices.
What’s your exposure? What portion of costs are tied to energy, freight, or commodities? If oil prices stay elevated, what happens to your margins? If the Fed is forced to hold rates higher, or even resume hikes, what happens to your debt service costs or ability to finance growth?
It also means building a range of plans: a base case where the conflict winds down and oil normalizes gradually, a moderate scenario where elevated prices persist through next year, and a worst-case scenario where an extended conflict triggers a recession.
Each scenario should carry clear triggers and corresponding responses, because decision-making during a crisis isn’t always the clearest. You’re better off writing down a plan of action before things go wrong, not after.
This is precisely the kind of work a fractional CFO is built for.
Most growing businesses don’t need, or can’t justify, a full-time hire. But the current environment makes the value of senior financial judgment undeniable.
A fractional CFO brings the analytical capability to model scenarios for your specific business, identify exposures that matter most, and build the controls and cash management systems that will save you if/when conditions shift — and all at a price you can afford.
They also offer positive ROI. For example, W.Bradford improved margins and cash flow after working with indinero fractional CFOs.
We’re living through unsettling times. Oil shocks, inflation swings, Fed uncertainty. But experienced financial leaders have seen versions of this before. The 2008 financial crisis, post-pandemic inflationary surge, and more. Businesses that survived and thrived didn’t predict the future. They had honest appraisals of their risks and opportunities, and a disciplined approach to growth while protecting their downside.
Nobody knows when the Strait of Hormuz will reopen, and fractional CFOs don’t have crystal balls. But we have something almost as good; a rigorous process for navigating a range of possible futures so that, whatever happens next, you’re not caught off guard.
Reach out for a free consultation today.
